China gives currency largest boost in a decade
China on Monday raised the daily reference rate for its yuan currency by the largest margin in a decade, officials and reports said, just three months after a surprise devaluation sent shockwaves through global markets.
The central People’s Bank of China adjusted the central rate of the yuan — also known as the renminbi (RMB) — upwards by 0.54 percent against the US dollar, according to a statement.
China now allows the currency to trade up or down two percent from the centrally set daily rate on the domestic foreign exchange market.
EUR/USD off lows but below 1.10
The euro lost ground on Wednesday as data showing euro zone inflation dipped back into negative territory in September fuelled expectations the European Central Bank will expand or extend its asset purchase programme.
The euro fell 0.4 percent to $1.1205, and was down 0.7 percent against the British pound, although it remained on track for a quarterly gain against the dollar.
“A weak number was expected and bolsters expectations that the ECB may have to expand its asset purchase programme from the 60-billion-euros-a-month to something larger, perhaps by year-end,” said Richard Falkenhall, currency strategist at SEB.
“That is negative for the euro, but a lot depends on how stock markets behave. If stocks drop, then the euro is likely to be supported as they are going in opposite ways.”.
Sterling trades above $1.52, but lags euro on soft UK data
Sterling rose 0.4 percent against a struggling dollar on Tuesday, as investors fretted about when the U.S. Federal Reserve will raise interest rates amid growing doubts over a global recovery.
The International Monetary Fund (IMF) cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and said policies aimed at increasing demand were needed.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation | Previous |
| 12:30am | EUR | ECB President Draghi Speaks | |||
| 7:15am | CNY | Caixin Services PMI | 50.5 | ||
| 4th-9th | GBP | Halifax HPI m/m | 0.70% | -0.90% | |
| 2:30pm | EUR | ECB President Draghi Speaks | |||
| 3:00pm | GBP | Services PMI | 54.6 | 53.3 | |
| 4:00pm | USD | FOMC Member Brainard Speaks | |||
| 6:45pm | USD | ADP Non-Farm Employment Change | 183K | 200K | |
| 7:00pm | USD | Trade Balance | -42.7B | -48.3B | |
| 8:30pm | USD | Fed Chair Yellen Testifies | |||
| USD | ISM Non-Manufacturing PMI | 56.6 | 56.9 | ||
| 9:00pm | USD | Crude Oil Inventories | 2.5M | 3.4M |
Explanation:- Market may pay more attention to Fed Yellen testify and ISM Non manufacturing index. We assume above data to come as per the expectation which might be negative for the USD.
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 65.68 | 0.17 | 788526 | 960103 |
| EUR/INR | 72.09 | -0.82 | 37048 | 48836 |
| GBP/INR | 101.23 | 0.07 | 21059 | 41217 |
| JPY/INR | 54.39 | -0.64 | 7908 | 15311 |
| Technical touch : |
Pair is trading near crucial resistance area. Any closing above 65.70 may further push the pair till 65.90 levels. Below this may fall till 65.40 levels.
