- PBOC done with yuan devaluation?
- RBA Assistant Gov Kent: Still waiting for impact of AUD declines
- Euro zone preliminary GDP and final CPI readings due
After three consecutive days of yuan devaluation, the Chinese central bank decided to hold off any forex adjustments and even set the reference rate 0.05% higher today. For some market analysts, this could be a sign that the PBOC is gearing up to make an even more aggressive move (Weekend rate cut, anyone?) or might be looking to debunk speculations that they’re in panic mode.
The Australian dollar got a bit of a boost from this announcement, as AUD/USD is up 14 pips (+0.14%) and edging close to .7400 while AUD/JPY is up 15 pips (+0.17%). In his testimony earlier today, RBA Assistant Governor Kent said that the economy is still waiting for the impact of the currency’s depreciation to kick in, hinting that domestic inflation could still pick up even if wage growth has slowed.
In the next few hours, all eyes and ears could turn to the euro zone, as the region is set to print its preliminary GDP readings for Q2 and its final CPI data for July. Germany is expected to show a 0.5% growth figure, stronger than the previous period’s 0.3% expansion, while Italy could print another 0.3% GDP reading. Overall, the euro zone is expected to maintain its 0.4% growth figure for the second quarter, which might allow the shared currency to stay afloat.
Aside from these economic releases, the Greek parliament’s vote on the third bailout could also pose an event risk for euro forex pairs. Keep in mind that other euro zone creditors are set to approve the latest set of bailout requirements as well, and it’s still unclear whether the IMF and Germany will be ready to back these up or not. Euro bulls are eager to see an end to this debt saga (at least for now) so they might be eager to charge if positive updates are announced.
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!