OANDA Senior Market Analyst Kelvin Wong joins Jonny Hart to discuss this week’s key economic data and events. A relatively quieter week versus last week’s major central banks’ galore as we head into the Easter holiday with several key events and economic data to take note.
Firstly, risk of currency war is lingering around the horizon after China central bank, PBoC’s move to weaken the onshore Chinese yuan daily fixing on last Friday, 22 March that led the offshore yuan (CNH) to tumble by -0.8% against the US dollar to hit a two-week low. This move seems to be a deliberate attempt to maintain some form of exports’ competitiveness for China after the surprise rate cut from SNB ahead of the Fed, and ECB that has occurred on Thursday, 21 March that triggered a bout of US dollar strength resurgence. A further weakening of the yuan may spark the revival of currency war vibes as major exporters such as South Korea, and Singapore join in the bandwagon to weaken their domestic currencies against the US dollar which in turn increases the odds of a global risk off episode.
Lastly, we have the release of Australia’s monthly CPI data for February on Wednesday, 27 March, and the all important closely watch US PCE inflation data out on Friday, 29 March.
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