Yuan fixed higher for first time in seven days
At this morning’s yuan fix, the People’s Bank of China strengthened the yuan for the first time in seven days, moving the mid-rate to 6.8894 from 6.8946 yesterday. Despite the fix, USD/CNH rose marginally on the day, up 0.16% at 6.8721. Coming on the back of yesterday’s news that US and China were planning to sit down for trade negotiations later this month, the move helped most equity markets across the region, with the Japan225 index currently up 0.08% and the HongKong33 CFD 0.11% higher though the ChinaA50 shares slid 0.2%.
Cloud still hangs over Turkey
Despite the more positive vibes elsewhere, the Turkey situation remains a thorn in the side of risk appetite. The US has warned the country to expect more sanctions if it does not hand over the detained American pastor quickly. USD/TRY is currently up 0.3% at 5.8488, snapping a three-day losing streak.
Low Aussie rates here to stay
In a speech before the House of Representatives Standing Committee on Economics, RBA Governor Lowe said the domestic economy was moving in the right direction, though reiterated there is not a strong case for any near-term adjustment in policy and would likely keep the current policy in place until benchmarks for unemployment and inflation are closer. He expects the next move in interest rates to be upwards with only a minute chance of a rate cut, only if there is a “China shock” or if there is a domestic housing market collapse.
On the Australian dollar, he expressed the opinion that a lower Aussie would be beneficial, helping to boost inflation and stimulate growth. The Aussie showed little reaction to the comments, instead posting gains after China announced a higher fix for the yuan versus the US dollar. AUD/USD is now up 0.17% at 0.7272.
European and Canadian CPI on the data slate
Today’s European calendar is filled with Euro-zone data. The June current account balance sets things going followed by consumer price readings for July. Prices are seen rising at the same pace as June on an annual basis but seen slipping 0.3% month-on-month. The later session is more Canada-centric, with both national CPI data and the Bank of Canada’s core CPI readings scheduled. The US’ Michigan sentiment index is seen ticking higher to 98.0 in August from 97.9 the previous month.
The full MarketPulse data calendar can be viewed here: https://www.marketpulse.com/economic-events/