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China holds 1 and 5 year rates steady for the 15th month in a row

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Forex news for Asia trading on
Tuesday 20 July 2021

The People’s Bank of China set
its one- and five-year Loan Prime Rates at unchanged rates for the
15th straight month, in line with the consensus
expectation (although there were some forecasts of a 5bp cut to the 1
year rate). As I post the offshore yuan is around its highest for the
day (USD/CNY lows) in a small range (for CNH trade).

On
the news front it was a light day. In Australia, coronavirus
lockdowns news
accelerated, the city of Melbourne (and state
Victoria) lockdown was extended for another 7 days and the state of
South Australia will have a 7-day lockdown from this evening (local
time). There was a slight decline in new case numbers from New South
Wales state (capital city is Australia’s largest, Sydney).

While
on Australia, the Reserve Bank of Australia July meeting minutes were
published, these are a little stale given the deteriorating health
news since the meeting back on July 6. Indeed, one of Australia’s
‘big four’ banks, Commonwealth Bank of Australia, now expect
that, given this deterioration and what it means for the economy, the
RBA will reverse its (July meeting) QE bond-buying taper decision scheduled for
implementation in mid-September if Sydney and/or Victoria are still
in lockdown at the time of the August Board meeting (on the 3rd, which is only a couple of weeks away). AUD/USD and NZD/USD traded a
few points up from their
earlier lows and as I post are more or less net
unchanged on the session.

Elsewhere
across major FX it was a session of tight ranges and little net
change.

ES
futures on Globex saw a bit of a bounce after the sharp sell-off
Monday US time. 

As I post BTC/USD is heading closer to the nice big fat round number of $30,000:

Forex news for Asia trading onTuesday 20 July 2021



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