The Australian and New Zealand dollars were weaker. The People’s Bank of China’s monetary easing measures yesterday did not help either.
The People’s Bank of China summary is here in case you missed it:
NAB Bank comments via Reuters report:
- “For the Australian and New Zealand dollars, they tend to reflect a greater degree of liquidity and freedom to reflect the realities that the Chinese economy is currently facing,” said Rodrigo Catril, chief foreign exchange strategist at National Australia Bank. “The monetary easing announced by the People’s Bank of China yesterday is not huge in size, but it does indicate that the People’s Bank of China is willing to support the economy as well as the fiscal side, and this may support the view that there will be some tolerance for a little bit of weakness in the Chinese yuan.”
On the sidelines, regarding politics:
- “I certainly think US politics, as we head into the November election, will become a bigger source of volatility for the markets,” said NAB’s Cattrell. “There’s still a lot of water to be treading in terms of what the candidates are pitching and how the polls might change as well. And of course, getting more clarity on key policies and priorities will be very important for the markets.” In cryptocurrencies, bitcoin fell
Meanwhile, the Commonwealth Bank of Australia was more forthright in expressing its disappointment:
- “AUD/USD… fell after the People’s Bank of China’s unexpected decision to cut its key interest rate. The rate cut and the results of the third meeting of the Chinese central bank are too modest to convince market participants to expect a significant acceleration in the Chinese economy.”
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We probably shouldn’t be too disappointed by the People’s Bank of China’s modest cuts, and we should probably have gotten used to such restraint by now. But we’d better do more of them.
UBS earlier:
The Australian and New Zealand dollars have been performing strongly since late last week.
