USD/CNH: Policymakers attempt to slow pace of depreciation – OCBC

FXStreet Insights Team FXStreet

USD/CNH traded higher but eased post CNY fix. Pair was last at 7.2236, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Bullish momentum on daily chart intact

“CNY fix came in much stronger than expected this morning – ‘conveys’ a message that recent spot USD/CNH move may be coming close to testing policymakers' threshold of tolerance for CNH weakness. On one hand, it may serve as a deterrence against further weakening in RMB but on the other, trump trade momentum may mean that USD/CNH remains better bid on dips.”

“Given a strong USD trend, policymakers can only slow pace of RMB depreciation at best. For USD/CNH to reverse trend, the USD needs to ease.”

“Bullish momentum on daily chart intact while RSI is near overbought conditions. Resistance at 7.25, 7.2750 levels. Support at 7.22, 7.20 (200 DMA).”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD consolidates gains above 0.700; focus on CPI data

AUD/USD has regained composure on Tuesday, reversing the previous day’s pullback and further extending its move past the key 0.7000 yardstick. The pair’s recovery has come despite another solid day for the Greenback ahead of the FOMC gathering. Moving forward, the release of inflation figures will be the main focus in Oz on Wednesday.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold holds above $4,000 as traders brace for Fed interest rate decision

Gold edges higher during American trading hours on Tuesday after trading in negative territory earlier in the day. A slight decline in Oil prices offers some relief, although a firmer USD limits the upside as traders await the Fed’s monetary policy announcement on Wednesday.

Australia CPI set to climb in September, fueling RBA rate-hike bets

The Australian Bureau of Statistics (ABS) will publish the September Consumer Price Index (CPI) on Wednesday at 00:30 GMT. The report is expected to show that inflation rose 4.2% from a year earlier, higher than the 4% posted in August. The monthly CPI is forecast at 0.7% following the 0.4% print from the previous month.

What can we expect from the RBNZ monetary policy decision?

On Wednesday, October 28 at 01:00 GMT, the Reserve Bank of New Zealand, led by Governor Anna Breman, is expected to raise the Overnight Cash Rate by 25 basis points, from 2.75% to 3%, as money markets price in a 100% chance. This would be the third-rate hike by the RBNZ, while the odds for another hike in December are nearly 50%.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.