- USD/CNH takes further measures after China’s central bank took steps to combat the coronavirus (COVID-19).
- PBOC cuts seven-day reverse repo rate, Moody’s cited weakness of China’s shadow banking industry.
- China’s Commerce Ministry, President Xi remain optimistic.
USD/CNH remains on the front foot around 7.1080 after the People’s Bank of China (PBOC) announced a rate cut on early Monday. Earlier, comments from China’s Commerce Ministry and President Xi Jin Ping kept the normal optimistic tone whereas Moody’s cited further weakness of the domestic shadow banking industry.
Read: China cuts interest rate, injects $7 billion into banking system
In its yet another move to fight the pandemic, China’s PBOC announced 20 basis points (bps) of a rate cut to its seven-day reverse repo. With this, the Chinese central bank’s benchmark interest rate currently stands at 2.2%.
Over the weekend, China’s President Xi Jinping said that the government will adjust support policies to protect small and medium firms from the impact of coronavirus outbreak. The national leader also pushed for the active resumption of operation and production to tame the negative implications of the coronavirus (COVID-19) epidemic.
Following that, China’s Commerce Ministry also crossed wires while saying that around 80% of restaurants are open for business. It was also mentioned that nearly all major supermarkets, convenience stores, shopping malls and farm produce retail markets have reopened.
Furthermore, Moody’s said that China’s shadow banking industry continues to shrink but the nationwide leverage is set to rise further. It’s worth mentioning that China reported 31 new coronavirus cases in the Mainland as of end-march 29 versus 45 a day earlier.
Amid all this, the market’s risk-tone remains heavy with the US 10-year treasuries declining nine basis points (bps) to 0.656% whereas stocks in Asia also marking losses by the press time.
Moving on, investors now await China’s official PMI numbers for March, up for publishing tomorrow, for fresh impulse.
Technical analysis
A six-day-old falling trend line near 7.1250/55 seems to limit the pair’s immediate upside while February month high near 7.0590 can check the bears during the downside.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 despite weak US employment data
EUR/USD loses its traction and declines toward 1.0850 after testing 1.0900 earlier in the session. Because Nonfarm Payrolls data for October missed the market expectation by a wide margin due to hurricanes and strikes, the US Dollar manages to hold its ground.
GBP/USD climbs above 1.2950, looks to end week little changed
GBP/USD benefits from the improving risk mood and trades in positive territory above 1.2950 in the American session on Friday as markets ignore the weak labor market data from the US. The pair remains on track to end the week flat.
Gold clings to small gains near $2,750 after US data
Gold clings to marginal recovery gains and trades slightly above $2,750. The 10-year US Treasury bond yield struggles to push higher after the dismal October jobs report and weaker-than-expected PMI data from the US, helping XAU/USD keep it footing.
Bitcoin Weekly Forecast: Run toward fresh all-time high hinges on US presidential election results
Bitcoin could experience a price pullback in the next few days ahead of the US presidential election, analysts say, an event that will be key to determining whether and how the crypto class will be regulated in the years to come.
Bank of Japan holds rates steady amid signs of modest GDP growth
Monthly industrial production results have been mixed but generally indicate a modest recovery in third-quarter GDP. Clear guidance from the Bank of Japan remains elusive, with each upcoming meeting being pivotal.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.