The Australian and New Zealand dollars have been on the soft side. Yesterday’s easings from the People’s Bank of China not bolstering them either.
The summary of the PBOC is here ICYMI:
- ForexLive Asia-Pacific FX news wrap: A series of easings from the People’s Bank of China
NAB comments via Reuters report:
- “For the Aussie and the kiwi, they tend to be reflecting a more liquid and free expression in terms of the realities currently facing the Chinese economy,” said Rodrigo Catril, senior FX strategist at National Australia Bank (NAB). “The easing coming from the PBOC yesterday is not huge in terms of magnitude, but it does signal that willingness for the PBOC to support the economy alongside the fiscal side, and that probably plays to the view that there will be some tolerance for a little bit of weakness in CNY.”
And, as an aside, on politics:
- “I think certainly the U.S. politics, as we get closer to the November election, will become a greater source of volatility for markets,” said NAB’s Catril. “There’s still a lot of water to go through in terms of what the candidates have to offer and also how the polling may change as well. And then of course, getting a bit more clarity in terms of what the key policies will be and priorities will be, will be very important for markets.” In cryptocurrencies, bitcoin fell
Meanwhile, Commonwealth Bank of Australia more forthright in the expression disappointment:
- “AUD/USD … lower following the People’s Bank of China’s unexpected decision to reduce its key policy interest rate. The interest rate cut and the outcomes of the Third Plenum are too modest to convince market participants of a significant acceleration in the Chinese economy is in prospect”
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We probably shouldn’t;t be too disappointed with the tiny cuts from the People’s Bank of China, we should probably be accustomed to such restrained actions by now. But still more would be nice.
UBS earlier:
- UBS says PBOC 0.1% rate cut on Monday maybe just a ‘down payment’ on more to come
AUD, and NZD, have been heavy since later last week
This article was written by Eamonn Sheridan at www.forexlive.com.
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