USDCNY FIX -Policy Driven ?

Back to back Economic Data misses have sent the Australian Dollar reeling. Retail sales came in .2% versus .3 % expected  but with the  trade balance coming in a -2.22 billion  versus -1.7 billion expected , we’ve  seen the reduction of  weak long AUD positions that were established this morning in anticipation of a neutral RBA forward guidance

On a positive note, the China  June Caixin Services PMI came in at 52.7 vs. 51.2 prior, which is providing some counterbalance to the weak Australian domestic data and  halting the Aussie dollar slide just above the .75 handle

Finally, and perhaps more significantly, local traders are looking over their shoulder at today’s PBOC fix, the weakest setting since 2011 ,which sent the USD   tentatively bid versus USDCNH  There’s  certainly some speculation and fear that today’s aggressively weaker Yuan  fix is a PBoC policy driven move.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes