- Analytics
- News and Tools
- Market News
- PBOC’s weekend moves on RRR shouldn’t hit risk too much - ING
PBOC’s weekend moves on RRR shouldn’t hit risk too much - ING
ING's strategists note that with US markets closed for the Columbus Day holiday, the focus in quieter conditions has been to assess whether the PBOC is trying to apply the brakes on the recent renminbi rally.
"On Saturday the PBOC cut the risk reserves ratio for FX forwards to zero from 20% - effectively reversing a move put in place to protect the CNY when it was under pressure in August 2018 at the height of the US-China trade war."
"The PBOC also fixed USD/CNY slightly higher than model-based estimates suggested, a commonly used policy to suggest slight displeasure with the pace of renminbi gains."
"The moves saw USD/CNY gap higher and will take some of the steam out of the recent rallies in commodity currencies (Norway's krone, Aussie and Canadian dollars) in G10 and the Mexican peso and South African rand stand out in the Emerging Markets space."
"Whether this means that USD/CNY now consolidates above 6.70 into the US election (and ushers in broader dollar consolidation) remains to be seen, although a more positive interpretation could read the PBOC move merely as a further liberalisation measure? However, the lack of the CNY tailwind tends to favour consolidation, rather than a further dollar decline."
"DXY to trade a 92.90-93.60 range near term."
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
