The US Dollar Weakens as PBOC Cut Rates Ahead of Jackson Hole


Although the US Dollar made a new high before the rate cuts, it pulled back from a five-week high after the Peoples Bank of China (PBOC) cut rates earlier today.

The 1-year prime loan rate was lowered to 3.65% from 3.7%, while the 5-year prime loan rate was reduced to 4.30% from 4.45%. The moves were quite different from markets forecasts which predicted 10 basis-point reductions for both.

These moves raised China’s CSI 300 and Hong Kong’s Hang Seng indices, with other APAC equities languishing. The commodity and growth linked AUD and New Zealand Dollars which are commodity and growth linked, got a boost while the US Dollar felt some selling pressure.

The Chinese rate cuts came in the face of a persistent economic flurry from a zero-tolerance Covid-19 policy and property sector woes. Residential mortgages are the most impacted by the 5-year rate and the 15-basis point change, which seems to attempt to restore borrower confidence.

This slow economic activity has been further compounded by dry weather cutting hydroelectricity production.

China’s Sichuan province is an industrial powerhouse that has been hit particularly hard by the energy outages. These manufacturers’ usage limits have been extended from Saturday to this Thursday.

Asian session saw crude oil slipping as speculation mounts that Iranian supply might return online to offset the loss of Russian production. The Brent futures contract dipped under US$ 95.50 bbl, and the WTI contract is below US$ 90 bbl.

Gold keeps lowering after Treasury yields added a few basis points across the curve to start the week. It is trading around US$ 1,744 an ounce before going to print.

The market will be focused on the Jackson Hole symposium, which begins on Thursday. This time last year saw the Fed labeling the accelerating inflation as transitory. This year, markets expect inflation to be heightened.

This Post Has 10 Comments

  1. Suivre Téléphone

    Que dois-je faire si j’ai des doutes sur mon partenaire, comme surveiller le téléphone portable du partenaire? Avec la popularité des téléphones intelligents, il existe désormais des moyens plus pratiques. Grâce au logiciel de surveillance de téléphone mobile, vous pouvez prendre des photos à distance, surveiller, enregistrer, prendre des captures d’écran en temps réel, la voix en temps réel et afficher les écrans du téléphone mobile.

  2. Suivre Téléphone

    Vous pouvez également personnaliser la surveillance de certaines applications, et il commencera immédiatement à capturer régulièrement des instantanés de l’écran du téléphone.

  3. najlepszy sklep

    Hey! Do you know if they make any plugins to assist with SEO?

    I’m trying to get my blog to rank for some targeted keywords
    but I’m not seeing very good gains. If you know of any please share.
    Many thanks! You can read similar article here: Sklep internetowy

  4. sklep online

    These are genuinely impressive ideas in concerning blogging.
    You have touched some fastidious points here. Any way keep up wrinting.
    I saw similar here: Najlepszy sklep

  5. e-commerce

    Excellent blog here! Also your site loads up very fast!
    What host are you using? Can I get your affiliate link to your host?
    I wish my site loaded up as quickly as yours lol
    I saw similar here: Dobry sklep

  6. sklep internetowy

    When someone writes an article he/she keeps the image of a
    user in his/her mind that how a user can be aware of it.
    Thus that’s why this post is outstdanding. Thanks! I saw similar here: Dobry sklep

  7. sklep online

    What’s up mates, its fantastic piece of writing about tutoringand fully defined, keep
    it up all the time. I saw similar here: Ecommerce

  8. sklep online

    Really no matter if someone doesn’t understand afterward its up to other people that they will assist, so
    here it takes place. I saw similar here: Dobry sklep

  9. ecommerce

    Wow, incredible blog structure! How lengthy have you been blogging for?

    you make running a blog glance easy. The full look of your web
    site is wonderful, let alone the content material!
    You can see similar here ecommerce

Leave a Reply

Important Link

Fund Your Deriv Account
Withdraw Funds to Your Local Currency
VIP Trading Signals
Learn To Trade

Contact Us

Follow Us


Forex, Crypto, Options, and Binary Options have both large potential rewards and large potential risks. Therefore, before investing or trading any of the assets, ensure you are aware of and willing to accept the accompanying risks. Do not trade money you cannot afford to lose.

All Rights Reserved. None of the content of this website can be published elsewhere by any means without the prior consent of the owner(s). Please, check our terms & conditions and privacy policy before continuing to use this website.

This website and its owner(s) are not in any way liable for any incurred loss, whether caused by the information provided on this website or otherwise. The use of this website, including the content and information provided, is the user’s sole liability.