CNY/USD Fundamental Outlook at 1500 GMT (EST + 0500)

 @ibtimes
on September 29 2009 3:14 PM

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.35 level and was supported around the ¥89.60 level.  Traders expect this week's Bank of Japan Tankan survey of business sentiment will evidence further improvement with the diffusion index for large manufacturers expected around -32 from -48 the previous quarter.  Data released in Japan overnight saw the August core consumer price index off 2.4% y/y, in-line with expectations and the latest evidence of deflation.  Finance minister Fujii verbally intervened again overnight, reporting he would not rule out intervention if currency moves are abnormal.  Fujii's latest comments suggest his yen policy is probably more aligned with the policy that was followed by the previous Aso government and Liberal Democratic Party than previously thought.  The Nikkei 225 stock index climbed 0.91% to close at ¥10,100.20.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥131.75 level and was supported around the ¥130.70 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥143.95 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥87.25 level. In Chinese news, the U.S. dollar gained ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8230 in the over-the-counter market, up from CNY 6.8220.  People's Bank of China reported it will continue its moderately easy monetary policy while highlighting the role of domestic consumption in pushing the economy.  Chinese financial markets will be closed from 1 October through 8 October for the National Day's holiday.  Some banks are predicting China will register consumer price inflation growth in November. 

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