The FX market isn’t quite sure how to react to the widening of the USD/CNY trading band and therefore it’s doing nothing. One one hand it can be seen as a vote of confidence in the increasing stability in the Chinese economy, which is a risk positive event, on the other hand it could also lead to increased volatility in the FX market which has a risk negative impact. I tend to sit the the latter camp in the shortish term, moving across to the former camp in the medium-longish term; nothing like having one foot in both camps (I’m starting to sound like an anlayst
).
EUR/USD is trading at 1.3070, USD/JPY is at 80.90 and AUD/USD is 1.0380.
Good luck today.
