Forex Investment and Currency Trading

USD-CNY
Spot had a central parity fixing of 6.9372 vs. Friday’s close of 6.9420. In May, the Chinese yuan (CNY) gained 0.66% against the USD, faster than the 0.35% appreciation in April, but much slower than the 4.2% appreciation in Q1. Market participants were concerned in April and May that the Chinese authorities may have changed their FX policy substantially, no longer favouring a strong currency. However, the current view is that this was not the case; that the authorities may well have changed, but rather in favour of a strong currency on a trade-weighted basis rather than just against the USD. [...]

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USD
Event risk: Mixed messages from the chain-store data but broad recessionary conditions and 4 consecutive falls in retail jobs suggest downside risk to consensus calling for a 0.2% rise in core retail sales (Mon). The ECRI leading index hints at still more potential downside for the Empire survey (Tue) and Philly (Thur). A 7%+ fall in Feb permits warns March housing starts (Wed) could fall sharply too. The Fed’s Beige Book (Wed) is likely to be peppered with anecdotes of yet more slowing in activity while the core CPI (Wed) should bounce back from an aberrant flat outturn to [...]

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