Early Thursday, China Securities Journal turned down the odds of an interest rate hike by the central bank, the People’s Bank of China (PBOC), in the short-term.
Key quotes
Although there is a high probability that fiscal policy normalization will also be put on the agenda, in the process of policy returning to normal, monetary policy will undoubtedly be brewed more fully and act earlier.
Price adjustment may not be a short-term focus.
FX implications
Following the news, USD/CNY bounces off an intraday low to 6.5675. However, the recently comparative weakness of the US dollar, coupled with no talks of the Fed’s rate change, can keep the bears hopeful.
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