ForexLive Asia-Pacific FX news wrap: PBOC steps up yuan intervention

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The
People’s Bank of China is continuing to hold the CNY (and therefore
the CNH also) from falling in value further. The Bank set the USD/CNY
reference rate on the 7.17 big figure again today. The modelled
estimate for the mid-rate was above 7.31 but yet again the PBoC set
it much, much lower.</p><p>In
addition to this Chinese state banks were in the spot market selling
USD/CNY. This is an intervention effort at the behest of the PBoC. It
had two impacts:</p><p>1.
it drove USD/yuan lower for a time</p><p>2.
it gave USD/yuan bulls an opportunity to scoop some up at a better
rate</p><p>As
I post USD/CNY is back to little changed for the session.
</p><p>China
published August Industrial Profits today. The headline figure for
this is the YTD y/y, which came in at a slower drop around -11.7%
compared to around -15.5% in July (see bullets above for more on this). However, the
change for August alone (not YTD, just the change during August from
July) was a much more encouraging +17.7% y/y.</p><p>From
Australia today we had monthly CPI for August. It came in at 5.2%,
well above the 4.9% y/y in July. The trimmed mean measure remained stuck at 5.6% y/y. A bright point was another measure of
underlying inflation, ie. the August CPI excluding Fruit and
vegetables, Automotive fuel, and Holiday travel and accommodation
came in at 5.5% y/y, down from 5.8% in July.</p><p>The
Australian dollar had popped a little going into the Australian CPI
and China IP figures (both were release simultaneously) but soon
dripped back towards little net changed on the day. NZD/USD
traded a similar pattern but its net lost some ground on the session.
The range is small though.</p><p>Small
ranges across most other major FX prevailed also with only minor, if
any, net change.</p><p>Asian
equity markets:</p><ul><li><p>
Japan’s
Nikkei 225 -0.5%</p></li><li><p>
China’s
Shanghai Composite +0.3%</p></li><li><p>
Hong
Kong’s Hang Seng +0.6%</p></li><li><p>
South
Korea’s KOSPI -0.3%</p></li><li><p>
Australia’s
S&amp;P/ASX 200 -0.2%
</p></li></ul><p>USD/CNH:</p>

This article was written by Eamonn Sheridan at www.forexlive.com.