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China Risks US Revenge

Is the PBoC starting to guide the yuan downward outright against the dollar after two years of trying to boost its value? The move seems to be reflecting concern in Beijing over China’s slowing economy. Is this enough of an excuse to risk a political fight with the US? Market perception is beginning to think that way now that the yuan has been trading at the lower end of its government mandated range this week. Up to this point investors figured that it was a one way speculative trade outright. The PBoC has fixed USDCNY at 6.3325, 56 pips lower than yesterday’s fix but still substantially higher than levels at the beginning of the month. Perhaps a reversal towards CNY strength according to analysts will come after the political transition in October along with signs of recovery in domestic growth in the latter half of the year.

Below are some other highlights of the week:


ASIA

 

AMERICAS Week in FX [1]

EUROPE Week in FX

 

WEEK AHEAD

  • Monetary Policy meetings from GBP, USD and EUR dominate
  • Confidence data is delivered from USD and NZD
  • Manufacturing and non along with PMI’s are released in CNY, EUR, GBP and USD
  • Sales, growth and trade are presented from CAD, AUD and CHF
  • AUD and GBP release building stats
  • USD finishes the week with employment

 

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.

Dean Popplewell

Dean Popplewell [6]

Vice-President of Market Analysis at MarketPulse [7]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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