The Pboc fixed the Yuan midpoint at a market-friendly 7.0433 vs the previous close of 7.0610 so the bias has been to sell USD this morning 

But with small volumes going through, it's beginning to feel more like your typical August as the markets don't seem to have much of an axe to grind one way or the other today other than pre risk event positioning squaring. 
But with the main risk events still a couple of days away, specifically Jackson Hole on Friday and PMI's on Thursday we could be back in the frying pan quickly if the yield curve inverts or Jay Powell reiterates his mid-cycle view of things.


The PBoC and CBIRC held a press conference yesterday on the new loan prime rate.  They noted that interest rate liberalisation would help improve monetary policy transmission but is not the monetary policy itself.

None the less improving the market transparency will prove beneficial over the long term as a more open policy approach will be welcomed by foreign investors who typically view Pboc policy transmission as murky at best.
 The shift to a more open policy regime is being viewed very favourably even more so as the Pboc moves to adopt additional monetary policy measures to lower the financing cost for the real economy.


 US market 
Looking at my ECN data, the broad-based equity market declines overnight came on thin trading volumes with the lowest number of shares changing hands across the US exchanges this month.
August is typically a low volume month as US traders usually use the last two weeks of August for a summer holiday respite.

But the low volumes may also suggest a high degree of uncertainty as investors head to the sidelines ahead of the Jackson Hole symposium and the next round of trade discussions.
Which raises the question if the markets will continue to be susceptible to outsized moves due to diminishing liquidity

Vanguard Market Pte Ltd provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.

Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.

Opinions are the authors — not necessarily Vanguard Markets Pte Ltd or its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD holds above 1.10 post-hawkish Fed cut

EUR/USD manages to hold above the1.10 after the Fed cut rates but signaled no further rate reductions. The bank acknowledged the strong labor market and robust consumption. However, it is worried about investment.


GBP/USD: Rising wedge at the top inflates downside risk

GBP/USD portrays a short-term rising wedge bearish formation while trading near 1.2475 during the Asian session on Thursday. One-week-old rising wedge surrounding monthly tops questions buyers.


USD/JPY keeps losses below 108.00 as BOJ disappoints the doves

USD/JPY keeps the losses below 108.00, as the Japanese Yen remains on the front foot in reaction to the Bank of Japan's (BOJ) status-quo that came in as a disappointment for the doves. 


Bitcoin dives below $10,000

Bitcoin has lost its cool towards the end of the Asian session on Thursday. After managing to defend $10,000 over the last few days, the granddaddy of cryptos has plunged below several other support areas including $9,900 and $9,800. 

Read more

Gold: Indecisive market, focus on today's close

Gold is currently trading at $1,480 per Oz, representing 0.21% drop on the day. On Wednesday, the yellow metal witnessed two-way business before ending the day with moderate losses at $1,494.

Gold News

Forex Majors