[MARKET ANALYSIS] Dollar is flat ahead of the midterms, while yuan weakens after the PBoC raised its FX RRR
ORIGINAL · Newsquawk[MARKET ANALYSIS] Dollar is flat ahead of the midterms, while yuan weakens after the PBoC raised its FX RRRRead originalHide original
DXY: Flat Struggles for direction in quiet FX trade and after softening yesterday amid the mixed performances in its major counterparts, while currency-moving catalysts remain light as participants await the US midterm elections and with geopolitical headlines providing mixed signals, as US President Trump stated that a deal with Iran could happen, although it was also reported that the US conducted a small-scale, defensive strike on Iran's Qeshm Island. EUR/USD: -0.1% Partially faded some of its recent gains with the single currency continuing to trickle lower beneath the 1.1200 handle. GBP/USD: Flat Trades flat after its recent indecision amid light pertinent newsflow and with the BoE expected to hike rates on Thursday. USD/JPY: Flat Takes a breather following its recent advances and stalled just beneath the 158.00 level amid the closure of markets in Japan. Antipodeans: AUD/USD Flat / NZD/USD -0.2% Lacks demand in the absence of relevant tier-1 data, and with AUD/USD flat heading into a widely expected RBA rate hike today, while price action is also not helped by the pressure in the yuan after the PBoC announced it would raise the FX RRR by 2ppts from 4% to 6% effective November 15th, which effectively reduces dollar liquidity in the market and suggests the PBoC is aiming to slow the appreciation of the yuan.
The November 3 update reported a flat dollar index, mixed currency-pair moves and yuan pressure alongside the PBoC’s announced FX RRR increase, effective November 15.
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DXY: Flat Struggles for direction in quiet FX trade and after softening yesterday amid the mixed performances in its major counterparts, while currency-moving catalysts remain light as participants await the US midterm elections and with geopolitical headlines providing mixed signals, as US President Trump stated that a deal with Iran could happen, although it was also reported that the US conducted a small-scale, defensive strike on Iran's Qeshm Island. EUR/USD: -0.1% Partially faded some of its recent gains with the single currency continuing to trickle lower beneath the 1.1200 handle. GBP/USD: Flat Trades flat after its recent indecision amid light pertinent newsflow and with the BoE expected to hike rates on Thursday. USD/JPY: Flat Takes a breather following its recent advances and stalled just beneath the 158.00 level amid the closure of markets in Japan. Antipodeans: AUD/USD Flat / NZD/USD -0.2% Lacks demand in the absence of relevant tier-1 data, and with AUD/USD flat heading into a widely expected RBA rate hike today, while price action is also not helped by the pressure in the yuan after the PBoC announced it would raise the FX RRR by 2ppts from 4% to 6% effective November 15th, which effectively reduces dollar liquidity in the market and suggests the PBoC is aiming to slow the appreciation of the yuan.
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