ForexLive Asia-Pacific FX news wrap: China cuts one-year funding rate

• Federal Reserve speakers on Wednesday include Governor Kugler
• Bank of England Monetary Policy Committee member Greene speaks on Wednesday
• China – top government economic adviser disappears after crticism of Xi Jinping
• Wall Street Journal Fed watcher Timiraos on sign of a weaker jobs market
• Fed SOMA Manager says markets see 50bp rate cut as good news, not bad
• Australian dollar down few tics after (monthly) headline inflation drops into target band
• Australian August CPI 2.7% y/y (expected 2.8%)
• PBOC sets USD/ CNY reference rate for today at 7.0202 (vs. estimate at 7.0212)
• PBOC 1-year Medium-term Lending Facility (MLF), rate cut to 2% (2.3% previously)
• Japan data – August services PPI 2.7% y/y vs. 2.6% expected
• Euro Forecast: $1.15 by Mid-2025, ECB Rate Cuts Key
• AUD/USD hits its highest since February 2023, remains UBS’ ‘most preferred’
• Economists says ‘No’ to China’s blitz of economic stimulus measures, its ‘not enough’!
• Australian monthly CPI due today, expected to be lower. Does it even matter to the RBA?
• NZD traders note – “It’s hard for the Kiwi to fall against a falling dollar”
• China Stimulus sparks global growth expecations, but raises inflation risks again
• Goldman Sachs predict continued equity buying by CTA systematic traders, in every scenario
• Boosting China’s Economy: JP Morgan Outlines Key Policy Needs
• Caroline Ellison has been sentenced to two years in jail
• Oil survey of inventory shows huge headline crude oil draw, much greater than expected
• Forexlive Americas FX news wrap 24 Sep: Weaker data sends the USD lower.
• Another record close for the Dow and the S&P
• Trade ideas thread – Wednesday, 25 September, insightful charts, technical analysis, ideas
• ECB’s Knot says further rate cuts coming through at last H1 of 2025

The
People’s Bank of China cut the Medium-term Lending Facility (MLF)
rate today, from 2.3% down to 2%, adding in 300bn yuan of 1-year
funding. Chinese markets rose again, following on from their
surge on Tuesday and Wall Street’s lead.

From
Australia, we had a monthly inflation reading. August headline
inflation dropped into the Reserve Bank of Australia target band of 2
– 3% at 2.7% y/y, well down from July’s 3.5%. Much of the drop
was attributable to federal and state government electricity rebates. Electricity prices had their largest fall on record, down nearly 18%.
Underlying inflation, as measured by the core trimmed mean came in at
3.4%, down from July’s 3.8% but still holding above the top of the
RBA target band.

Major
FX rates traded in relatively subdued ranges with some retracement
for the USD after its sharp fall on Tuesday. Gold hit another record
high.

This article was written by Eamonn Sheridan at www.forexlive.com.