There are posts above on comments made by Federal Reserve Altanta head Bostic late on Friday where he trimmed his FOMC forecast to just one rate cut this year, from 2 previously. I expect we’ll be getting more of these calls ahead and the prospects of a June FOMC cut to diminish.

The session today pretty much kicked off with comments from Japan’s Vice Finance Minister for International Affairs Kanda. He is the official who will instruct the BOJ to intervene, if and when he judges it necessary. His remarks today represented more forceful verbal intervention than we have had recently. If you need a refresher on what to listen out for when officials escalate their intervention rhetoric these posts from the last time USD/JPY was reaching lofty 150+ heights are, together, a handy ‘cheat sheet’:

USD/JPY lost ground after Kanda and is more or less in the middle of the session’s range now as I update.

We also had minutes of the January Bank of Japan meeting, with a notable point being some members pointing out that the BOJ is not under pressure to accelerate rate hikes at a pace that was seen in western countries.

From China we had the PBOC setting the USD/CNY central rate at 7.0996, nearly 1300 pips stronger (for CNY) than market expectations. This gap to the estimate was the largest since April 2023 and sent both onshore and offshore yuan surging higher in market trade. The strong yuan was assisted by reported CNY buying from major Chinese State Banks. More on this in the bullets above.

AUD and NZD were notable beneficiaries of the stronger yuan but both have subsided to the (more or less) middle of their ranges on the session today. EUR and GBP tracked a similar pattern.

cnh wrap chart 25 March 2024 2