ForexLive Asia-Pacific FX news wrap: PBOC steps up yuan intervention

The
People’s Bank of China is continuing to hold the CNY (and therefore
the CNH also) from falling in value further. The Bank set the USD/CNY
reference rate on the 7.17 big figure again today. The modelled
estimate for the mid-rate was above 7.31 but yet again the PBoC set
it much, much lower.

In
addition to this Chinese state banks were in the spot market selling
USD/CNY. This is an intervention effort at the behest of the PBoC. It
had two impacts:

1.
it drove USD/yuan lower for a time

2.
it gave USD/yuan bulls an opportunity to scoop some up at a better
rate

As
I post USD/CNY is back to little changed for the session.

China
published August Industrial Profits today. The headline figure for
this is the YTD y/y, which came in at a slower drop around -11.7%
compared to around -15.5% in July (see bullets above for more on this). However, the
change for August alone (not YTD, just the change during August from
July) was a much more encouraging +17.7% y/y.

From
Australia today we had monthly CPI for August. It came in at 5.2%,
well above the 4.9% y/y in July. The trimmed mean measure remained stuck at 5.6% y/y. A bright point was another measure of
underlying inflation, ie. the August CPI excluding Fruit and
vegetables, Automotive fuel, and Holiday travel and accommodation
came in at 5.5% y/y, down from 5.8% in July.

The
Australian dollar had popped a little going into the Australian CPI
and China IP figures (both were release simultaneously) but soon
dripped back towards little net changed on the day. NZD/USD
traded a similar pattern but its net lost some ground on the session.
The range is small though.

Small
ranges across most other major FX prevailed also with only minor, if
any, net change.

Asian
equity markets:

• Japan’s
  Nikkei 225 -0.5%

• China’s
  Shanghai Composite +0.3%

• Hong
  Kong’s Hang Seng +0.6%

• South
  Korea’s KOSPI -0.3%

• Australia’s
  S&P/ASX 200 -0.2%

USD/CNH: