ForexLive Asia-Pacific FX news wrap: Verbal JPY intervention, & China state banks buy CNY |

On Mar 28, 2024

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Fed speakers Monday include Bostic, Goolsbee and Cook Bank of England Monetary Policy Committee member Mann speaks Monday AUD getting another boost from the China intervention to support CNY FX intervention – China major state banks seen selling USD/CNY China’s Industry Minister with very upbeat comments Goldman Sachs raised EUR/CHF targets PBOC sets USD/ CNY reference rate for today at 7.0996 (vs. estimate at 7.2267)China vice Commerce minister says will expand opening up to outside world Monetary Authority of Singapore seen loosening policy soon as April, weaker SGD forecast BOJ not under pressure to accelerate rate hikes at pace that is seen in western countries Bank of Japan January meeting minutes – rising likelihood of hitting inflation target Japan Kanda says closely watching FX moves with high sense of urgency Financial Times reports that China blocks use of Intel & AMD chips in government computers Post-Bostic headline: “Why a Fed rate cut in June is not yet a done deal”China’s Finance Minister said will allocate more fiscal resources More on China’s Premier Li weekend comments – “room for further macro policy steps”France has raised its terror alert to its highest level China’s Li: low inflation, low central government debt means ample room for macro policy ICYMI: Late Friday Fed’s Bostic shifted his 2024 forecast to only 1 rate cut 2024 (from 2)Trade ideas thread – Monday, 25 March, insightful charts, technical analysis, ideas Monday morning open levels – indicative forex prices – 25 March 2024 Bitcoin fails to sustain breakout, traders brace for potential support retest Reddit stock IPO technical analysis: Bears take control after initial optimism Week Ahead Preview – highlights include US PCE, Aus CPI, Riksbank Weekly Market Outlook (25-29 March)Goldman Sachs has raised its forecast for USD/JPY to 155 (from 145) (3 month horizon)Fed’s Bostic say he now anticipates only one rate cut this year What are the technical saying for the major currency pairs going into the new trading week

There
are posts above on comments made by Federal Reserve Altanta head
Bostic late on Friday where he trimmed his FOMC forecast to just one
rate cut this year, from 2 previously. I expect we’ll be getting
more of these calls ahead and the prospects of a June FOMC cut to
diminish.

The
session today pretty much kicked off with comments from Japan’s
Vice Finance Minister for International Affairs Kanda. He is the
official who will instruct the BOJ to intervene, if and when he judges it
necessary. His
remarks today represented more forceful verbal intervention than we
have had recently. If you need a refresher on what to listen out for
when officials escalate their intervention rhetoric these posts from
the last time USD/JPY was reaching lofty 150+ heights are, together, a handy
‘cheat sheet’:

USD/JPY
lost ground after Kanda and is more or less in the middle of the
session’s range now as I update.

We
also had minutes of the January Bank of Japan meeting, with a notable
point being some members pointing out that the BOJ is not under
pressure to accelerate rate hikes at a pace that was seen in western
countries.

From
China we had the PBOC
setting
the USD/CNY central
rate
at 7.0996,
nearly
1300 pips stronger
(for
CNY)
than market expectations.
This gap to the estimate was the largest since April 2023 and sent
both onshore and offshore yuan surging higher in market trade. The
strong yuan was assisted by reported CNY buying from major Chinese
State Banks. More on this in the bullets above.

AUD
and NZD were notable beneficiaries of the stronger yuan but both have
subsided to the (more or less) middle of their ranges on the session
today. EUR and GBP tracked a similar pattern.

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