- China's cyberspace regulator - must continue the Communist Party supervision of cyberspace
- Tiawan's Q2 semiconductor output +41% y/y
- RBNZ Governor Orr says he wants the cash rate (OCR) to be clearly above its neutral level
- PBOC sets USD/ CNY reference rate for today at 6.8065 (vs. estimate at 6.8097)
- ANZ are forecasting the RBNZ cash rate (OCR) higher to 4% by year-end
- Presidents Xi and Putin will both attend the G20 in Indonesia (November)
- Japan July headline inflation 2.6% y/y (vs. expected 2.2%)
- UK consumer confidence index has hit its lowest ever on record
- RBNZ Governor Orr says getting towards point where next rate move not obvious
- NZ trade data for July shows the annual deficit has hit a new record high
- UBS is forecasting Brent crude oil to $125 by the end of this year
- Germany's Finance Ministry says its economic outlook is bleak
- Fund managers say EUR is undervalued. Have been saying it since 2018.
- ICYMI - the 5 Fed speakers on Thursday - the heat is on for further rate hikes
- Forexlive Americas FX news wrap; EURUSD breaks to lowest level in a month
- Note - Federal Reserve Chair Powell to speak at Jackson Hole on 26 August 10am eastern
- Trade ideas thread - Friday, 19 August 2022
- Marginally higher closes for the major US stock indices in a ho-hum session
The US dollar strength seen on Thursday followed through, to a smaller extent, during the timezone here. The USD rose pretty much across the board. USD/JPY hit a new high for the month above 136.25. EUR, AUD, GBP, NZD, CAD all lost a little ground against the USD.
On the central bank front we had comments from RBNZ Governor Orr indicating there are further hikes ahead but perhaps the pace could slow. Analysts at ANZ are not convinced, forecasting another 100 bp in hikes by the end of this year.
From the People’s Bank of China we had another weaker setting for the onshore yuan reference rate (i.e. higher USD/CNY). Offshore yuan (CNH) has been dropping, the PBOC has not been standing in the way.
On the data calendar was Japanese inflation for July. All three measures rose from the previous month (see bullets above for the detail). The most recent statements out of the Bank of Japan have reiterated that they see the current high levels of inflation as transitory and thus there is no prospect of a tightening of monetary policy. We heard this over and over again from other developed market central banks in the not-too-distant past. They were oh-so-wrong. Today’s rising CPI data from Japan will rekindle chatter of potential change from the BOJ.
Bitcoin lost ground against the USD alongside currencies.
USD/offshore yuan:
