China

Forex Trading News: China Cuts Rates Again

Mr. Danish FX — Mon, 22 Dec 2008 05:39:37 -0500

CHINA CUTS DEPOSIT RATE AND LENDING RATE BY 27BPS, CUTS RESERVE REQUIREMENTS BY 50BPS

- New rates effective Dec 25, 2008

***This is the 5th Cut this Quarter for China

Forex Trading News: China Cuts Rates--Biggest Cut Since 1997

Mr. Danish FX — Wed, 26 Nov 2008 05:12:11 -0500

CHINA PBOC CUTS INTEREST RATES BY 108 BPS; CUTS RESERVE REQUIREMENTS (UNEXPECTED)

- Big banks reserve requirements cut by 100bps
- Small banks reserve requirements cut by 200bps
- Cuts target ensuring sufficient liquidity in banking system to help growth
- Cuts 1year deposit rate to 2.52% from 3.6% ;
- Cuts 1 year deposit rate to 5.58% from 6.66%
- Cuts interest rate on excess reserves and requires reserves by 27bps
- Note: This is the largest cut in China's key lending rate since October 1997
- Reminder: Post g20 meeting there was speculation that PBoC would lower interest rates by 56bps

Forex News: China Rescue Package buoys stock markets

Greg Michalowski — Mon, 10 Nov 2008 08:23:10 -0500

China announced a $586 billion stimulus package over the weekend. The stimulus was in housing and infrastructure through 2010. They also vowed to maintain a relatively loose monetary policy.

The Olympic stimulus by the Chinese was enough to create a bubble in the commodity markets that benefited the AUDUSD and NZDUSD in particular. Of course, returning to that type of buying would not be a benefit (slow and steady is more beneficial) However, in a world economy starving for growth pockets the announcement is welcomed. Not surprising copper and metals are up this morning.

Off the news AUDUSD and NZDUSD gapped higher. The USDJPY and Yen crosses (GBPJPY, EURJPY,etc.) all benefitted. As did the EURUSD as China relied on Eurozone exported goods in their pre-Olympic build up. On the back of the weak employment statistics last Friday, the dollar may be under some pressure today.

Volatility persists....

Greg Michalowski — Mon, 21 Jan 2008 21:00:08 -0500

Hang Seng down 5.5%. Nikkei down 4%. The JPY crosses rallied strong but came back off. Clearly, the markets are very nervous.

China Central Bank official on wires

Greg Michalowski — Wed, 14 Nov 2007 14:32:59 -0500

Says China is very firm on policy of keeping the US dollar as its main reserve currency.

What does "main" mean?

ECB's Trichet on wires

Greg Michalowski — Thu, 08 Nov 2007 15:40:00 -0500

Says China needs faster appreciation from the Yuan. Says that by improving forex regime, it is in China's own best interest. He adds that undervalued forex rate imposes negative externalities for other country producers and says that competition from China must be "fair".

Overnight News

Greg Michalowski — Wed, 07 Nov 2007 07:39:27 -0500

The dollar got hit hard last night as China's top political advisor, Cheng Siwei said that China should diversify its 1.43 trillion FX reserves into buying strong currencies like the EUR. Later Cheng clarified his statement and said he did not mean to say we should buy more EUR's, but did not elaborate.