Frances Cheung, Research Analyst at Westpac, notes that the expectations for tightening in Asia are building up, lending some support to Asian FX.
“The PBoC did not pre-emptively grant MLF, breaking the recent pattern of their operations. We do expect the PBoC to roll over the MLF that matures later this month and do not foresee any liquidity squeeze around year-end as the central bank has a number of tools to be deployed. USD/CNY is likely to remain in the 6.60-6.65 range given stable liquidity and capital flow conditions.”
“China CPI to be released over the weekend will be closely watched, as the inflation outlook, apart from deleveraging efforts, is the key driver for the bond market. If CPI prints around 1.8-1.9%, the already stabilised sentiment is likely to be sustained.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.