Chinese fireworks – Onet.pl

intriguing is the moment chosen by the PBOC on the devaluation of the exchange rate, taking into account the recent series of dismal data from the Chinese economy. This suggests that the central bank may have concluded that the economic situation is so bad that it requires unconventional moves. The weakening of the course is positive for GDP, but less than 2 percent. not enough to secure a growth rate of 7 percent. If that’s the hidden purpose of the PBOC, the yuan consecutive jumps are real.

If today is a prelude to devaluation changes in exchange rate policy PBOC and further weakening the yuan will take place for the global economy this is a dangerous turn. Improving the competitiveness of Chinese exports will take place at the expense of other Asian economies, hence the rapid depreciation, among others, Singaporean and Taiwanese dollar and Korean won. Even with cheaper Juan, it is possible weakening of imports, especially of raw materials, which is another blow mainly to Australia. But there is another reason for the alleged actions PBOC, behind which stand no disturbing signals from the economy. China in the IMF are trying to attach the yuan to a basket of currencies, based on the determined value of the SDR. Allowing greater flexibility in the yuan may be a nod to the West. But at this moment the market is not sure which option is correct, and that the decision coincidence in time weak data on trade and inflation speaks for the first weekend explanation.

In this case, we get an increase in risk aversion, where the USD is the currency of choice against the Asian currencies. After the stock market do not see a lot of confusion (Shanghai +0.5 per cent., Tokyo -0.4 per cent.), But if it’s just the calm before the storm, capital will begin to flow into the JPY. AUD and NZD are the most sensitive to bad news from China, so here pressures may persist longer. Another series of weak data from China (tomorrow, retail sales and industrial production) can be a catalyst.

On Tuesday we have a calendar of German ZEW (11:00) and data from the Canadian construction market (14:15). In the German sentiment index, it is possible to recover from concerns about grexit, but it is doubtful that the report had a measurable impact on the euro. Stronger-than-expected decline in housing starts (prog. 195 thous.) Will weaken the CAD, although developments on the oil market has a stronger impact here. Yesterday, the strong rebound in prices of WTI (2.12 percent.) Gave support for the loonie, so the main attention will focus today on two reports on the situation in the oil market (OPEC Department of Energy) to judge whether the rebound was justified.