Asian FX markets once again traded in limited ranges awaiting the outcome of the Federal Open Market Committee (FOMC) meeting on Wednesday, 20 September 2023.

News and data flow was very light.

On the central bank front we had the People’s Bank of China once again setting the USD/CNY reference rate over 1100 points away from the modelled estimate. The Bank set the rate at 7.1733 vs. the estimate at 7.2839. The Bank continues to enforce a stronger yuan.

We also had the release of the Reserve Bank of Australia’s September meeting minutes. The Bank appears set on trying to convey a hawkish tilt to its deliberations, but it also said that the “recent flow of data was consistent with inflation returning to target within a reasonable timeframe while the cash rate remained at its present level.” Which is strongly suggestive of no further rate hikes. As I have mentioned previously the next critical data point is the quarterly inflation data due from the Australian Bureau of Statistics on October 25. Until we get that data point the November RBA meeting is best though of as a 'live' meeting. We'll be able to make a better assessment after that inflation data.

Asian equity markets:

  • Japan’s Nikkei 225 -1.2%, a lot lower after Monday was a holiday for the markets in Japan

  • China’s Shanghai Composite -0.1%

  • Hong Kong’s Hang Seng +0.02%

  • South Korea’s KOSPI -0.3%

  • Australia’s S&P/ASX 200 -0.5%

USD/CNH update:

usdcnh wrap chart 19 September 2023