FX Flows – FXWW Chatroom

The PBOC fix today normalised. USDCNY central parity at 6.3975 versus yesterday’s spot close of 6.3990. Some punters were looking for another day of higher fix, and were disappointed. Offshore USDCNH fell instantly from 6.4530 to 6.4400. Onshore opened stable too and USDCNH backed off further as market focussed on closing the spread of CNY and CNH. 

New Zealand Q2 retail sales rose just 0.1% as supposed to +2.6% previous quarter. Market was expecting a rise of 0.5%. That number sent market fleeing away from Kiwi – Nzd fell to 0.6539 and pushed AudNzd to high of 1.1265. AudUsd is bid but encountered supply in the 0.73-eighties. Even RBA Deputy Governor Christopher Kent’s remarks on the labour market developments failed to challenge the sellers. There should be more offers higher and there is a Aud1.35bn notional worth of 0.7400 strikes rolling off today NY cut. 

Euro and UsdJpy have been absolutely boring. I guess Greek Watching next. IMF published their report on Greece after NY closed and said it would only make a decision on providing further financing for Athens after steps are taken to make its debt burden more sustainable. This puts pressure on the Eurogroup Finance Ministers meeting in Brussels today 3.00pm CET (9.00am EST). Not long ago, Germany’s newspaper Bild published a report that in event the ministers cannot agree to the third bailout, Greece could get Eur6bn bridging loans. 

Article in Kathimerini said Greek creditors are praising Athens’ cooperation ahead of Eurogroup meeting in Brussels. Me too, I praise them for their audacity to keep borrowing. But can’t really blame them, free money keeps pouring. 

Euro offers are planted above 1.1200 and bids under 1.1110. 

UsdJpy slipped into tight range – well, it’s Obon Week after all. UsdJpy buyers are awaiting near 123.80-124.00; light selling into 124.50’s and better at 124.90-125.00. 

Usd/Asia is mixed today, or confusing. Calm returned to CNH and CNY – attention now on Malaysian Ringgit. Central bank seemed to have removed their interest and letting spot market climb higher. Our trader believes that it is real money accounts driving UsdMyr higher, converting bond proceeds into Usd. At one stage, onshore banks widened spreads as liquidity fizzled. 
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