ForexLive Asia-Pacific FX news wrap: The PBOC cut rates by much less than expected

<ul><li><a href="https://www.forexlive.com/news/chinese-property-firm-country-garden-set-to-be-removed-from-hong-kongs-hang-seng-index-20230821/">Chinese property firm Country Garden set to be removed from Hong Kong’s Hang Seng Index</a></li><li><a href="https://www.forexlive.com/centralbank/audusd-at-risk-of-dropping-under-060-unless-china-stimulates-big-time-20230821/">AUD/USD at risk of dropping under 0.60 (unless China stimulates, big time)</a></li><li><a href="https://www.forexlive.com/centralbank/ubs-see-limited-catalysts-that-could-outweigh-the-usdjpy-carry-trade-20230821/">UBS see limited catalysts that could outweigh the USD/JPY carry trade</a></li><li><a href="https://www.forexlive.com/centralbank/aud-and-nzd-marked-lower-after-the-peoples-bank-of-china-rate-cut-is-less-than-expected-20230821/">AUD and NZD marked lower after the People's Bank of China rate cut is less than expected</a></li><li><a href="https://www.forexlive.com/centralbank/peoples-bank-of-china-sets-usd-cny-reference-rate-today-at-71987-vs-estimate-72893-20230821/">People's Bank of China sets USD/ CNY reference rate today at 7.1987 (vs. estimate 7.2893)</a></li><li><a href="https://www.forexlive.com/centralbank/pboc-loan-prime-rates-lpr-cut-1-year-345-prior-355-5-year-42-prior-420-20230821/">PBOC Loan Prime Rates (LPR) CUT: 1-year 3.45% (prior 3.55%) &amp; 5 year 4.2% (prior 4.20%)</a></li><li><a href="https://www.forexlive.com/news/brent-chinas-weak-economy-property-debt-implosion-is-weighing-but-oil-use-holding-up-20230821/">Brent: China's weak economy &amp; property debt implosion is weighing, but oil use holding up</a></li><li><a href="https://www.forexlive.com/centralbank/fed-chair-powell-at-jackson-hole-boa-expect-him-to-pushback-against-rate-cut-expectations-20230821/">Fed Chair Powell at Jackson Hole, BoA expect him to pushback against rate cut expectations</a></li><li><a href="https://www.forexlive.com/centralbank/goldman-sachs-is-not-expecting-a-strong-signal-from-federal-reserve-chair-powell-this-week-20230821/">Goldman Sachs is not expecting a strong signal from Federal Reserve Chair Powell this week</a></li><li><a href="https://www.forexlive.com/news/mufg-stays-short-eurusd-in-its-trade-of-the-week-targeting-a-drop-under-108-20230820/">MUFG stays short EUR/USD in its trade of the week – targeting a drop under 1.08</a></li><li><a href="https://www.forexlive.com/news/new-zealand-july-exports-dropped-on-the-month-while-imports-rose-20230820/">New Zealand July exports dropped on the month while imports rose</a></li><li><a href="https://www.forexlive.com/centralbank/wall-street-journal-fed-insider-timiraos-expects-higher-fed-neutral-rate-ahead-20230820/">Wall Street Journal Fed insider Timiraos expects higher Fed 'neutral' rate ahead</a></li><li><a href="https://www.forexlive.com/news/previewing-the-week-ahead-in-financial-markets-tldr-version-is-nvda-earnings-vs-powell-20230820/">Previewing the week ahead in financial markets. TL;DR version is NVDA earnings vs. Powell</a></li><li><a href="https://www.forexlive.com/centralbank/icymi-japan-to-boost-the-minimum-wage-largest-increase-ever-20230820/">ICYMI – Japan to boost the minimum wage, "largest increase" ever</a></li><li><a href="https://www.forexlive.com/news/icymi-nomura-slashed-their-china-gdp-forecast-for-2023-to-46-from-51-20230820/">ICYMI – Nomura slashed their China GDP forecast for 2023 to 4.6% (from 5.1%)</a></li><li><a href="https://www.forexlive.com/centralbank/weekend-the-pboc-met-with-bank-executives-and-told-lenders-again-to-boost-loans-20230820/">Weekend – the PBOC met with bank executives and told lenders, again, to boost loans</a></li><li><a href="https://www.forexlive.com/news/trade-ideas-thread-monday-21-august-2023-20230820/">Trade ideas thread – Monday, 21 August 2023</a></li><li><a href="https://www.forexlive.com/news/monday-morning-open-levels-indicative-forex-prices-21-august-2023-20230820/">Monday morning open levels – indicative forex prices – 21 August 2023</a></li><li><a href="https://www.forexlive.com/technical-analysis/a-review-of-the-technicals-driving-the-different-currency-pairs-and-more-20230820/">A review of the technicals driving the different currency pairs (and more)</a></li><li><a href="https://www.forexlive.com/news/weekly-market-outlook-21-25-august-20230820/">Weekly Market Outlook (21-25 August)</a></li><li><a href="https://www.forexlive.com/news/newsquawk-week-ahead-jackson-hole-pboc-lpr-flash-pmis-cbrt-japans-tokyo-cpi-20230819/">Newsquawk week ahead: Jackson Hole, PBoC LPR, Flash PMIs, CBRT, Japan's Tokyo CPI</a></li><li><a href="https://www.forexlive.com/news/forexlive-americas-fx-news-wrap-18-aug-nasdaq-and-sp-close-lower-for-3rd-week-in-a-row-20230818/">Forexlive Americas FX news wrap 18 Aug: Nasdaq and S&amp;P close lower for 3rd week in a row</a></li></ul><p>
China's
central bank, the
People’s Bank of China, cut
the one-year loan prime rate from 3.55% to 3.45%, while the
five-year LPR, which serves as the basis for housing mortgage rates,
remained unchanged at 4.20%. Reuters poll of 35 analysts
showed all
had
expected cuts
to both rates, after the
Bank unexpectedly
lowered the medium-term lending facility rate last week. Widespread
expectations were for 15bp cuts to each, so the 10 and zero that were
delivered were received with disappointment by the market.
</p><p>The
initial response was for lower ‘risk’, in the major FX space this
meant a marking down for AUD and NZD, but EUR and GBP were down a
little also. This all soon reversed though.</p><p>Chinese
mainland and Hong Kong equities dropped also, but have bounced from their session lows.
</p><p>Oil
shrugged it off, Brent has risen nearly a dollar on the day.
</p><p>Asian
equity markets:</p><ul><li><p>
Japan’s
Nikkei 225 +0.95%</p></li><li><p>
China’s
Shanghai Composite -0.15%</p></li><li><p>
Hong
Kong’s Hang Seng -0.66%</p></li><li><p>
South
Korea’s KOSPI +0.6%</p></li><li><p>
Australia’s
S&amp;P/ASX 200 -0.07%
</p></li></ul><p>

Brent oil:</p>

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