ForexLive Asia FX news wrap: CNY set at its lowest for ten years

Author: Eamonn Sheridan | Category: News

Forex news for Asia trading Thursday 8 August 2019

The People's Bank of China set the mid-rate for USD/CNY above 7 today for the first time in a decade, weakening the yuan again but not by as much as the market had expected. Expectations for the reference rate were well above the 7.0039 result and the immediate response was u-turn (lower) for USD/CNH and some encouragement for risk currencies. USD/JPY traded a little higher but as I update is holding under its US time high. AUD/USD managed to pop its overnight high to just over 0.6780.

USD/CNH:Forex news for Asia trading Thursday 8 August 2019

NZD/USD was shifted around by further comments from the RBNZ Governor and Assistant Governor. Both Orr and Hawkesby maintained their easy outlook for policy and largely reiterated what they had said the previous day following the shock half-point rate cut. NZD/USD traded a (circa) 0.6440/0.6470 range.

EUR/USD has edged a few ticks higher from early levels but has not been a focus for the session. Cable has performed better, its up 30-odd points on the day here in Asia. The Canadian dollar added points against the USD, helped not only by the better sentiment re yuan but also by steadying oil prices. 

Chinese trade data for July was released today, showing further growth in the trade surplus with the US. Exports to the US did pull back (exports were higher to the rest of the world), but imports from the US dropped. 

As an added note on the yuan, while it was set at its lowest for 10 years against the USD, against its basket the decline has taken it to its lowest (below 92) since the basket was introduced in 2015 (the basket is against the currencies of 24 of China's trading partners.)

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