PBOC instigates volatility
News circulated yesterday that the People’s Bank of China is changing the way it fixes and prices the USD/CNY daily rate as they do away with “counter cyclical” calculations. This is likely to mean the currency will become more volatile.
Lady Algos blushes
ZAR spiked yesterday on news that South African President Jacob Zuma had resigned. But, in fact, he hadn’t.
Algorithms, known as Algos, are programmed to search articles for keywords and understand their meaning. It seems that in this instance they got the wrong end of the stick when they presumed articles about SpaceX apparently losing a US satellite named “Zuma” meant that the President was no longer in his seat.
The rand seemed to settle as the trading day progressed.
Only dollar beater
USD rose against all its trading partners on a good Tuesday for the greenback, except for JPY, after the BOJ tweaked its operations. The central bank said that it will now be buying less long-dated bonds within its asset purchase program.
GBP up on numbers
The UK economy showed some good signs this morning as YoY and MoM manufacturing and industrial production beat expectations. This helped the pound recover from 2-week lows and it now trades in around 1.3530.
All quiet on the Western front
A quiet data day for the USD today. However, news could come out of three separate speeches this afternoon by Federal Reserve bank presidents Charles Evans, Robert Steven Kaplan and James Bullard.
Christopher Morriss, The WorldFirst Team