Forex news for Asia-Pacific trading on October 25, 2018
- Yuan falls to 10-year low
- PBOC sets yuan midpoint at 6.9510 vs last close at 6.9492
- PBOC's Pan: Stable fundamentals to keep yuan stable
- China said to tell two state-owned oil companies to halt purchases from Iran
- China considers further tax cuts and potential VAT adjustment
- October Tokyo CPI +1.5% vs +1.5% y/y expected
- Fed's Mester: Sees GDP growth topping 3% this year
- Mester: US policy still accommodative, need to hike to neutral territory
- More from Mester: Might have to make technical adjustment on IOER
- Brazil: Bolsaro holds comfortable lead ahead of Sunday's vote
Markets:
- Gold flat at $1232
- Nikkei 225 -1.2%
- Shanghai Comp -0.6%
- S&P 500 futures -25 points
- JPY leads, AUD lags
Once again the market woke up when Chinese markets opened. This time it wasn't Chinese stocks but the Chinese yuan that did the damage. The fix was the highest since 2016 and that set of some further selling to just above the 2016 high in USD/CNY (or just below that level, depending on the source).
That immediately set off some broad risk aversion with the commodity currencies falling around 50 pips led by the Australian dollar as it hit stops on the way to a fresh low since 2016. The earlier Oct low was 0.7041 and as that broke stops were tripped down to 0.7029 where it trades at the lows of the day.
It's similar in NZD/USD as it hit stops on the fall below 0.6500 and down to 0.6479, which is a low since 2016 as well.
The pain started earlier in USD/JPY as earnings from AMZN and GOOG included soft revenues and forecasts, which canceled out two-thirds of the equity market rally. Futures are down about 1% at the moment and USD/JPY is down 25 pips to 112.17.
The euro and sterling are mostly tracking the US dollar so far but beginning to come under in bit of pressure.
Be careful out there today.
