PBOC Joins Forces With Powell to Hit the Brakes on Dollar Rally
The People’s Bank of China and Federal Reserve delivered a one-two punch to the dollar Friday, spurring the biggest selloff in a month and raising the specter of further weakness ahead. The PBOC announced that banks would resume using the “counter-cyclical” factor when calculating the yuan’s daily reference rate, restraining the influence of market forces that have been driving the currency lower versus the greenback. Roughly three hours later, Federal Reserve Chairman Jerome Powell gave foreign-exchange traders another reason to sell the dollar, saying he sees little sign of inflation accelerating above the central bank’s 2 percent target. Read More @ https://www.bloombergquint.com/markets/2018/08/24/pboc-joins-forces-with-powell-to-hit-the-brakes-on-dollar-rally#gs.0J_MVWY
What’s really going on with China’s economy?
The recent weakness comes as the country is fighting a trade war with the United States. The world’s top two economies have now imposed tariffs on $50 billion of each other’s goods, and are threatening far more. President Donald Trump’s top economic adviser, Larry Kudlow, said this month that the Chinese economy “looks terrible” while the US economy is “crushing it.” The reality is more nuanced, but what happens in China’s economy affects businesses around the globe. Its huge manufacturing industries suck in parts and materials from countries around the world, fashioning them into goods for export or for sale in China. Read More @ https://money.cnn.com/2018/08/24/news/economy/china-economy-trade-war/index.html
Investors watch for Italy debt-rating downgrade, amid fears of forced selloff
Holders of Italian bonds will nervously eye the debt-rating agencies over the next few weeks ahead of what many anticipate is an imminent downgrade of the country’s sovereign-debt rating, a move that would inflict pain on a bond market already struggling to stem selling among skittish investors. Analysts say sooner or later one of the ratings services will pull down Italy’s credit rating to a notch above the so-called junk level, and spark fears of an eventual slide into the dicey-credit bucket altogether. Despite the higher yields on offer in the Italian bond market, investors are wary of being caught in a scenario where a downgrade into “junk” would prompt conservative investors to dump their holdings of Italian sovereign debt, causing bond prices to collapse and yields to surge. Bond prices move in the opposite direction of yields. Read More @ https://www.marketwatch.com/story/investors-watch-for-italy-debt-rating-downgrade-amid-fears-of-forced-selloff-2018-08-24
WHAT ARE JPY, USD AND EUR INDEX TECHNICAL CHARTS SAYING?
USD is for sure looking towards the south and more downside ahead – after both FED & PBOC come together to stop the USD Rally – expect massive GAPS Monday morning. USD testing the RE-TEST LINE – and if breaks then $94 is REAL.
EURO is forming a nice BULLISH HEAD & SHOULDER!! Italy challenges are ahead and could stop the EURO at Resistance but technically it looks good for a Rally!!
JPY weakening have started and will continue to weaken as a safe haven.
MONDAY NEWS THAT MIGHT AFFECT YOUR TECHNICAL TRADES
Most banks are closed on Monday – expect a quiet Monday but GAPS not in favor for USD.
4.00pm – German Info Business Climate will be released and we are expecting a good data.
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