ForexLive Asia-Pacific FX news wrap: Chinese markets benefit from Politburo economy pledge

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The
G3 central bank meetings this week:</p><ul><li>Federal
Open Market Committee (FOMC) on Wednesday, European
Central Bank on
Thursday, and the Bank of Japan on Friday
</li></ul><p>put
a dampener on major FX volatility during the session.</p><p>The
announcement from China’s Politburo promising more support for the
Chinese economy provided a regional focus though. See the bullets
above for more on the Politburo announcements (be aware details are
basically non-existent still). In addition measures should include:</p><ul><li>addressing
local debt risks through a comprehensive debt resolution plan
</li><li>putting
job stability at a higher, strategic level</li><li>real
estate policy to be adjusted promptly, replacing the previous "not
for speculation" rhetoric</li></ul><p>Chinese
property developer stocks in Hong Kong and on mainland exchanges
rallied sharply. Chinese equity markets rallied more broadly also.</p><p>The
yuan traded higher, helped along by another strong mid rate fixing
from the People’s Bank of China (500+ points lower than the
estimate for USD/CNY). The yuan also found bids from large Chinese
state banks who were actively intervening to support the yuan by
selling USD/CNY and USD/CNH.</p><p>China-proxy
FX such as AUD and NZD also gained, though not nearly to the same
extent as the yuan.
</p><p>Asian
equity markets:</p><ul><li><p>
Japan’s
Nikkei 225 -0.3%</p></li><li><p>
China’s
Shanghai Composite +1.6%</p></li><li><p>
Hong
Kong’s Hang Seng +3.2%</p></li><li><p>
South
Korea’s KOSPI +0.1%</p></li><li><p>
Australia’s
S&amp;P/ASX 200 +0.4%
</p></li></ul>

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