ForexLive Asia FX news wrap: China holds 1 and 5 year rates steady for the 15th month in a row

Author: Eamonn Sheridan | Category: News

Forex news for Asia trading on Tuesday 20 July 2021

The People's Bank of China set its one- and five-year Loan Prime Rates at unchanged rates for the 15th straight month, in line with the consensus expectation (although there were some forecasts of a 5bp cut to the 1 year rate). As I post the offshore yuan is around its highest for the day (USD/CNY lows) in a small range (for CNH trade).

On the news front it was a light day. In Australia, coronavirus lockdowns news accelerated, the city of Melbourne (and state Victoria) lockdown was extended for another 7 days and the state of South Australia will have a 7-day lockdown from this evening (local time). There was a slight decline in new case numbers from New South Wales state (capital city is Australia's largest, Sydney).

While on Australia, the Reserve Bank of Australia July meeting minutes were published, these are a little stale given the deteriorating health news since the meeting back on July 6. Indeed, one of Australia's 'big four' banks, Commonwealth Bank of Australia, now expect that, given this deterioration and what it means for the economy, the RBA will reverse its (July meeting) QE bond-buying taper decision scheduled for implementation in mid-September if Sydney and/or Victoria are still in lockdown at the time of the August Board meeting (on the 3rd, which is only a couple of weeks away). AUD/USD and NZD/USD traded a few points up from their earlier lows and as I post are more or less net unchanged on the session.

Elsewhere across major FX it was a session of tight ranges and little net change.

ES futures on Globex saw a bit of a bounce after the sharp sell-off Monday US time. 

As I post BTC/USD is heading closer to the nice big fat round number of $30,000:

Forex news for Asia trading onTuesday 20 July 2021
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