PBOC’s Yi: Will be able to maintain normal monetary policy and positive interest rates

Dhwani Mehta FXStreet

People’s Bank of China (PBOC) Governor Yi Gang said on Wednesday, the central bank “will be able to maintain a normal monetary policy and positive interest rates for as long as possible.”

“China's potential economic growth is expected to be kept within a reasonable range,” Yi added.

Additional comments

Will step up targeted support for key and weak sectors.

Will improve market-oriented floating foreign exchange system, effectively manage and guide market expectations.

Will deepen supply-side financial reforms.

Will strengthen and improve supervision of financial sector, establish long-term scheme to stabilise financial sector.

Financial institutions and stakeholders should shoulder responsibility of 'rescuing themselves' from risks.

Market reaction

The USD/CNY pair was last seen trading at 7.2730, modestly flat on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD continues to target 1.2000

EUR/USD builds on Monday’s optimism, edging closer to the key 1.2000 area while hitting tops last seen back in June 2021. The latest push higher reflects ongoing selling pressure on the US Dollar, with the broader risk environment still supportive and investors once again turning their attention to tariff-related risks emerging from the White House.

GBP/USD loses some momentum ahead of1.3800

GBP/USD continues to grind higher on Tuesday, climbing toward the 1.3800 handle and setting fresh multi-month highs as broad-based US Dollar weakness remains the dominant theme prior to Wednesday’s FOMC event.

Gold picks up pace, hovers around $5,100 zone

Gold is holding onto a positive tone, reclaiming the area near $5,100 per troy ounce and maintaining its uptrend well in place for yet another day on Tuesday. The yellow metal continues to draw support from a soft US Dollar, as well as lingering uncertainty around trade policy and wider geopolitical risks, all preceding the Fed’s interest rate decision.

Australia CPI expected to edge higher ahead of key RBA policy meeting

Australia will release the Consumer Price Index report on Wednesday, and it is expected to show inflation rose 3.6% year over year in December, slightly above the previous reading of 3.4%. The monthly CPI is foreseen at 0.7% after posting 0% in November.

Four problems of the US Dollar

The US Dollar Index returned to last year's lower bound, which we had not seen since 2022. The drivers are investment portfolio diversification, concerns about the US economic growth slowdown, rumours of FX interventions and active selling by carry-traders.

XRP price struggles below $2.00 despite steady ETF demand

Ripple (XRP) is trading around $1.88 at the time of writing on Tuesday, correcting from the previous day’s high of $1.95. The cross-border remittance token remains under immense pressure amid a weak technical structure.