Forex news for Asia trading on Wednesday 20 October 2021



Much of the focus of the session was on China with early limit moves lower for coal and coke due to the overnight news on China's state planner (the National Development and Reform Commission of the People's Republic of China (NDRC)) threatening intervention in the coal market following a meeting with key players domestically.

The barrage of news and data continued out of China, as you can see above I've rejigged the format of the bullet-point links to headlines for the day to group the China, and China-related, items together.

From the PBOC we had a substantial injection of funds via open market operations (OMO), following a string of days of drains or neutral. The injection is said to be related to tax season payments and government bond issuance. The PBOC have been consistent in saying that it would be keeping domestic liquidity conditions stable using medium-term lending facilities (MLF - we saw one of these conducted last Friday) and OMOs (we saw this today).

The yuan hit a five and a half year high against its basket today.

Elsewhere across major FX:

  • USD/JPY hit a nearly four high above 114.60, yen crosses higher also of course
  • EUR, AUD, NZD, GBP and CAD all rose for gains (not overly large) against the USD. 'Reflation' was the word again with global bond pricing higher prevalent. Indeed, the spread between the US 3 mth and 10 year hit its widest since June and the 10 yr yield moved to a 5 month high.

Having noted the move higher for currencies I should also add that since the highs there has been some retracement across the board, to varying extents.

USD/JPY to its highest since November of 2017 today, monthly candles:

Forex news for Asia trading onWednesday20October 2021China-related: