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As doubts grow about the strength of its economic recovery, foreign money has left China's markets and the currency has fallen 4% against the dollar since late January. Analysts at Nomura and Societe Generale say the yuan could soon head for 7.3, which as last plumbed in November. Reflecting that, the trade-weighted CFETS basket against which the People's Bank of China (PBOC) manages the currency, has dropped to 99 from 100 in February. THE CHEAP CURRENCYBecky Liu, head of China macro strategy at Standard Chartered Bank, expects the yuan will continue to depreciate. "The interest rate gap remains wide, so many hedge funds continue to use yuan as a funding currency," Liu said.

☆ Why is the US dollar so strong again?
▼ + stars: | 2023-05-18 | by ( Harry Robertson | ) www.reuters.com time to read: +4 min

LONDON, May 18 (Reuters) - If investors agree on one thing this year, it's that the dollar is going to fall. The go-to explanation of currency strategists right now is the debt-ceiling debacle is boosting the dollar. Traders currently expect the U.S. central bank to cut interest rates sharply later this year as a recession takes hold, yet Tan is skeptical. If the dollar rises slightly, some traders may be forced to close out their short positions by buying the dollar, which then boosts its value. But a simple technical indicator is that it is very atypical for you to have a straight-line decline in the dollar."

The greenback took an early dive after data showed the New York Federal Reserve's Empire State manufacturing index plunged to -31.8 this month from a reading of 10.8 in April. "The things that have weighed on the dollar recently have not gone away, such as the debt ceiling, even though there has been some progress made." In late morning trading the dollar index , which measures the greenback's value against six major peers, fell 0.2% to 102.48. Analysts have said many factors could be behind the dollar's recent strength, including concerns about U.S. inflation and safe-haven buying driven by fears about the debt ceiling standoff and global economic growth. It earlier jumped to 19.7 for the first time since March 10, when it hit a record high of 19.8 on a volatile trading day.

SINGAPORE, May 15 (Reuters) - The U.S. dollar fell slightly from a five-week high on Monday after a period of strength that has confused analysts. The euro was up 0.27% against the dollar on Monday at $1.088, rebounding after falling 1.54% the previous week. That helped send the dollar index , which measures the greenback against six major peers, down 0.19% to 102.49. Alvin Tan, head of Asia FX strategy at RBC Capital Markets, said a pick-up in U.S. bond yields over the last two days had supported the currency. "If you remove the uncertainty around the debt ceiling situation, the sentiment has been turning bearish against the dollar," said Khoon Goh, head of Asia research at ANZ.

☆ Dollar languishes as bank crisis fears ebb on Credit Suisse rescue
▼ + stars: | 2023-03-21 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, March 21 (Reuters) - The dollar regained some ground on Tuesday but was pinned near a five-week low as traders tiptoed back into riskier assets after UBS' state-backed takeover of Credit Suisse allayed some fears of a widespread, systemic banking crisis. "There has been pretty modest demand for U.S. dollars at the Fed swap lines, so that is a positive sign in and of itself," said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA). The dollar slipped 0.12% to 131.15 against the Japanese yen , while the U.S. dollar index , which measures the greenback against a basket of currencies, fell 0.04% to 103.30. Lower U.S. rate expectations also added to downward pressure on the dollar ahead of the Fed's two-day policy meeting commencing later on Tuesday. The Reserve Bank of New Zealand said on Tuesday it saw no immediate need to request the reinstatement of a U.S. dollar swap line that expired in 2021.

☆ Cautious calm returns to bank stocks as focus shifts to regulation
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: +5 min

Focus is also shifting to the possibility of tighter regulation in the U.S. banking sector, particularly for mid-tier banks like SVB (SIVB.O) and New York-based Signature Bank, whose collapses last week roiled financial markets. Investors had been particularly concerned about the huge bond holdings, particularly in U.S. Treasuries, of Japanese lenders. However, Japanese finance minister Shunichi Suzuki said on Wednesday differences in the structure of bank deposits, meant local banks wouldn't face incidents similar to SVB's collapse. In an attempt to avert a similar crisis down the line, the Federal Reserve is also considering tougher rules and oversight for midsize banks similar in size to SVB. "A year after starting to raise interest rates, the Federal Reserve is still chasing evidence that higher borrowing costs are slowing the U.S.

☆ Bitcoin, USDC stablecoin rally after U.S. intervenes on SVB
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +3 min

SINGAPORE, March 13 (Reuters) - Bitcoin and other cryptocurrencies rallied on Monday after U.S. authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB) and as cryptocurrency firm Circle assured investors its peg was secure. The moves came as authorities took possession of New York-based Signature Bank (SBNY.O), the second bank failure in a matter of days. Stablecoin USD Coin (USDC) recovered to $0.9917, closer to its par and up from last week's lows around $0.88. Over the weekend, USDC had lost its 1:1 dollar peg and hit a record low on Saturday on concerns over the exposure of Circle — the firm behind USDC — to Silicon Valley Bank. Circle CEO Jeremy Allaire said in a tweet its $3.3 billion USDC reserve deposit held at the collapsed Silicon Valley Bank (SIVB.O) will be fully available when U.S. banks open Monday.

☆ VIEW US intervenes to shore up SVB deposits, stem financial fallout
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +10 min

March 13 (Reuters) - The U.S. government announced actions to shore up deposits and stem any broader financial fallout from the sudden collapse of tech startup-focused lender Silicon Valley Bank (SIVB.O) (SVB), sending U.S. stock futures higher. "The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. The fact that SVB and Signature Bank depositors will be made whole is critical in maintaining trust in the financial system and should help stem contagion fears this week. But it also means that 50 basis points (a possible Fed interest rate hike) is off the table." Given what's happened in the U.S. financial system, a 25 basis point hike is more likely than a 50 basis point hike."

☆ Instant view: US intervenes to shore up SVB deposits, limit financial fallout
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +11 min

March 13 (Reuters) - The U.S. government announced actions to shore up deposits and stem any broader financial fallout from the sudden collapse of tech startup-focused lender Silicon Valley Bank (SIVB.O) (SVB), sending U.S. stock futures higher. ALVIN TAN, HEAD OF ASIA FX STRATEGY, RBC CAPITAL MARKETS, SINGAPORE:"Markets remain unsettled from the SVB failure. "The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. ANTHONY SAGLIMBENE, CHIEF MARKET STRATEGIST, AMERIPRISE FINANCIAL, TROY, MICHIGAN:"It was imperative that regulators stepped in and decisively acted before markets around the world opened for the week. GREG MCBRIDE, CHIEF FINANCIAL ANALYST, BANKRATE:"While the Fed has talked about a lot in the past year, until today it has been in the context of monetary policy.

☆ Instant view: Incoming BOJ chief Ueda says current low rates appropriate
▼ + stars: | 2023-02-24 | by ( ) www.reuters.com time to read: +6 min

Feb 24 (Reuters) - Incoming Bank of Japan (BOJ) Governor Kazuo Ueda said on Friday it was appropriate to maintain ultra-loose monetary policy as inflation has yet to sustainably and steadily meet the central bank's 2% target. "I think he's intentionally doing that, so that the market will calm down a little bit about policy change expectations." "I don't think Ueda has the same stance as (Haruhiko) Kuroda but it is not clear whether Ueda would tweak the BOJ policy as the market expected." CHARU CHANANA, MARKET STRATEGIST, SAXO MARKETS, SINGAPORE"No surprises there, we expected Ueda to take it slow and he's starting off echoing Kuroda's views. He has been out of touch with the BOJ policy making since 2005 and will take time even if he was to consider policy normalisation at some stage."

LONDON/SINGAPORE, Feb 22 - The dollar rose slightly on Wednesday, continuing to trade near six-week highs on the back of strong economic data. Survey data released on Tuesday showed U.S. business activity unexpectedly rebounded in February to reach its highest in eight months. On Wednesday, the euro was down 0.15% at $1.063, just above Friday's six-week low of $1.061. EuroThe dollar index was up 0.13% at 104.28, not far off the six-week high of 104.67 hit at the end of last week. Themos Fiotakis, head of FX strategy at Barclays, said he still expcts the dollar to fall by the end of the year.

LONDON/SINGAPORE, Jan 31 (Reuters) - The dollar ticked higher on Tuesday ahead of a raft of central bank decisions but remained on track for its fourth consecutive monthly loss. The Federal Reserve will set interest rates on Wednesday, followed by the European Central Bank (ECB) and Bank of England (BoE) on Thursday. That meant it was set for its fourth monthly drop, having fallen around 11% since hitting a 20-year peak in late September. Investors then expect the ECB and BoE to raise their main interest rates by 50 bps each on Thursday. Sterling was last 0.29% lower at $1.231, but was on track for its fourth monthly increase.

The euro was down 0.12% against the dollar at $1.088, just off the $1.093 level reached on Friday, which was the highest since early May. Meanwhile, the dollar was up 0.1% against the yen , at 130.28 yen per dollar, having hit an 8-month low of 127.22 on Jan. 16. Those expectations have caused the dollar index , which surged on the back of Fed rate hikes last year, to fall more than 11% from September's 20-year high of 114.78. Expectations of further rate increases by the European Central Bank have also aided sentiment and supported the euro. The U.S. dollar was little changed against its Canadian counterpart ahead of the Bank of Canada's latest rates decision on Wednesday, buying C$1.337.

☆ Asia stocks slide toward weekly loss as central banks plough on with rate hikes
▼ + stars: | 2022-12-16 | by ( Tom Westbrook | ) www.reuters.com time to read: +4 min

"Central banks are still hawkish, still intent on raising rates," said Alvin Tan, Asia currency strategist at RBC Capital Markets in Singapore. "So there's a tension between the central banks being more hawkish than the market has been expecting, and that dichotomy has been emphasised over the past 48 hours by both the Fed and the European Central Bank." "This is not a pivot," she said of the smaller rate rate rise. The dollar index rose 0.9%. Gold fell against the rising dollar, dropping 1.7% to sit at $1,777 an ounce in Asia.

☆ Dollar edges up as darkening growth outlook hurts sentiment
▼ + stars: | 2022-12-07 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, Dec 7 (Reuters) - The dollar crept higher on Wednesday as top executives from the biggest U.S. banks warned of an impending recession, which dampened risk appetite and kept the greenback supported. Against the dollar, sterling fell 0.4% overnight, and was last 0.05% lower at $1.2128. It's part of our baseline," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia. Against a basket of currencies, the U.S. dollar index was last 0.05% higher at 105.60. The offshore yuan was last marginally higher at 6.9845 per dollar, having been supported by an easing of China's strictest COVID-19 restrictions.

☆ Volatility in yuan spurs bets China will widen its band
▼ + stars: | 2022-11-30 | by ( ) www.reuters.com time to read: +4 min

SHANGHAI, Nov 30 (Reuters) - As macroeconomic risks induce unprecedented levels of volatility in China's yuan, investors are betting that authorities may widen the currency's tight trading band for first time since 2014 to allow market forces greater say. Day-to-day yuan volatility has been as high as 16% on some days in October, compared with a tame 1% to 4% range in the months and years before. Policy sources have told Reuters they have considered widening the trading band over the past few years to show their commitment to long-term market reforms. Rising volatility in yuan-rouble trading earlier this year prompted the central bank to double the trading band for the pair to 10% in March. Yet, most analysts who think a band widening is due also do not think it is imminent.

The euro rose ahead of inflation data due on Wednesday. The Aussie , often used as a liquid proxy for the yuan, rose 1.2% to $0.6734. EURO ZONE INFLATIONThe euro was up 0.4% at $1.0380, not far from a five-month peak of $1.0497 hit on Monday. Flash euro zone inflation figures for November are due on Wednesday, with economists polled by Reuters expecting inflation to come in at 10.4% year-on-year. St. Louis Fed President James Bullard said the Fed needed to raise interest rates quite a bit further, while New York Fed President John Williams and Richmond Fed President Thomas Barkin echoed similar views.

☆ Comments from market watchers on the COVID-19 protests in China
▼ + stars: | 2022-11-28 | by ( ) www.reuters.com time to read: +4 min

ALVIN TAN, ASIA FX STRATEGIST, RBC CAPITAL MARKETS, SINGAPORE:"The scale of the protests will necessarily elicit a response from Beijing. KEN CHEUNG, CHIEF ASIA FX STRATEGIST, MIZUHO, HONG KONG:"The China economy is heading to the direction of reopening but the road to the reopening could be a bumpy one. "Overall, the China Q4 growth outlook should remain grim given the COVID resurgence and the related mobility tightening. GARY NG, ECONOMIST, NATIXIS, HONG KONG:"The market does not like uncertainties that are difficult to price and the China protests clearly fall into this category. MARTIN PETCH, VICE PRESIDENT, MOODY'S INVESTORS SERVICE:"We expect the protests ... to dissipate relatively quickly and without resulting in serious political violence.

☆ Market watchers' comments on COVID-19 protests in China
▼ + stars: | 2022-11-28 | by ( ) www.reuters.com time to read: +6 min

Here's what market watchers are saying about the unrest:ALLAN VON MEHREN, CHIEF ANALYST, DANSKE BANK, COPENHAGEN:"Normally protests in China are aimed at local governments but a crowd in Shanghai directed their protest against the Communist Party and Xi Jinping." "The protests come as the recent tweaks in the zero-Covid policy seem to have backfired as they led to rising cases across the country that subsequently triggered new restrictions being implemented. MARK HAEFELE, GLOBAL WEALTH MANAGEMENT CIO, UBS, ZURICH:"We do not expect economic or market headwinds in China to abate significantly over the coming months. KEN CHEUNG, CHIEF ASIA FX STRATEGIST, MIZUHO, HONG KONG:"The China economy is heading to the direction of reopening but the road to the reopening could be a bumpy one. GARY NG, ECONOMIST, NATIXIS, HONG KONG:"The market does not like uncertainties that are difficult to price and the China protests clearly fall into this category.

☆ Dollar rises as China defends stringent COVID policy, dampening risk sentiment
▼ + stars: | 2022-11-07 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The two currencies were huge beneficiaries of a broad rally on Friday - rising nearly 3% - as speculation that China could soon end its COVID restrictions gathered pace and buoyed risk appetite. But hints of some easing of market conditions, with the unemployment rate rising to 3.7%, fuelled hopes that the much sought after Fed pivot could be on the horizon, capping the dollar's gains. Against a basket of currencies, the U.S. dollar index last stood at 111.02. "Judging by market reaction, investors really focused on the lift in unemployment rate, and that might have led to market participants scaling back their expectations on the Fed funds rate." Four Federal Reserve policymakers on Friday also indicated they would still consider a smaller interest rate hike at their next policy meeting.

☆ Storm clouds gather over the pound as focus turns back to dire economy
▼ + stars: | 2022-11-02 | by ( Harry Robertson | ) www.reuters.com time to read: +4 min

The good news for new Prime Minister Rishi Sunak is that few analysts now expect the pound to fall below parity with the dollar. A warm October has helped natural gas prices fall but a cold winter could drive up the cost of Britain's energy imports again, said Jordan Rochester, currency strategist at Nomura. DOLLAR PRESSURENot all strategists think the pound will return to near the lows seen in September. "The global economy is slowing down and heading for a recession and in such a scenario, the U.S. dollar does tend to outperform," said Alvin Tan, a senior currency strategist at RBC. Further rate hikes from the Federal Reserve, including on Wednesday, are also likely to support the dollar, he said.

☆ Analysis: Xi's next premier faces tough task reviving Chinese economy
▼ + stars: | 2022-10-24 | by ( Kevin Yao | ) www.reuters.com time to read: +4 min

China's economic tsar, Liu He, a U.S.-trained economist who is seen as the brains behind earlier reforms, will be replaced by He Lifeng, another Xi acolyte. "We face the problem of weakening expectations and confidence and it's empty talk if we cannot revitalise the economy," Jia said. China's economic miracle started in 1978 when Deng Xiaoping kicked off historic reforms, allowing more private enterprises and opening the economy to foreign investment. The poll showed China's growth could pick up to 5.0% in 2023, helped by a lower base. Xi's Standing Committee choices disappointed investors who had been hoping he would keep some reform-minded officials, including former Guangdong party boss Wang Yang.

☆ China's Xi clinches third term, packs leadership team with loyalists
▼ + stars: | 2022-10-23 | by ( Yew Lun Tian | ) www.reuters.com time to read: +3 min

REUTERS/Tingshu WangBEIJING, Oct 23 (Reuters) - China's Xi Jinping secured a precedent-breaking third leadership term on Sunday and introduced a new Politburo Standing Committee stacked with loyalists, cementing his place as the country's most powerful ruler since Mao Zedong. Shanghai Communist Party chief Li Qiang followed Xi onto the stage at the Great Hall of the People as the new leadership team was introduced, meaning he is likely to succeed Li Keqiang as premier when he retires in March. The other members of the seven-man Standing Committee, China's top governing body, are Zhao Leji and Wang Huning, who return from the previous committee, and newcomers Cai Qi, Ding Xuexiang and Li Xi. Li Qiang is also new to the Standing Committee. Xi Jinping also has total control over the larger Politburo and Central Committee," he said.

☆ Reaction to China's 20th Communist Party Congress
▼ + stars: | 2022-10-23 | by ( ) www.reuters.com time to read: +2 min

Oct 23 (Reuters) - China's Xi Jinping secured a precedent-breaking third leadership term on Sunday and introduced a new Politburo Standing Committee stacked with loyalists, cementing his place as the country's most powerful ruler since Mao Zedong. I can imagine that zero-COVID policy is likely more entrenched and there’s going to be further push on this issue of common prosperity and the like.”CHRIS MILLER, PROFESSOR AT TUFTS UNIVERSITY, MASSACHUSETTS“The party congress has reaffirmed Xi's decisive role in ruling the Communist Party, marking a continued shift away from collective leadership of party elites toward a personalized dictatorship. It also appears to have confirmed the downgrading of economic growth as a key party goal, relative to other agenda items such as zero-COVID and the party's political and ideological control. On tech, the key theme was self-sufficiency in science and technology, which is to be expected given the increasing decoupling of the U.S. and Chinese tech sectors.”GARY NG, SENIOR ECONOMIST, ASIA PACIFIC, NATIXIS, HONG KONG“The new inner circle will extend and heighten the current policy stance, and generally it seems that most of the newly appointed officials seem to be Xi’s key allies. So I guess this is also a move of the further consolidation of power, or maybe in the future, of course, performance is important, but also loyalty is increasingly a key concern when picking officials.”Register now for FREE unlimited access to Reuters.com RegisterReporting by Rae Wee in Singapore and Xie Yu in Hong Kong; Editing by William MallardOur Standards: The Thomson Reuters Trust Principles.

Three of the four new Standing Committee members owe their political rise to Xi, and the fourth is believed to be closely aligned with him. All but Guangdong party chief Li Xi worked under Xi in the 2000s, either in affluent Zhejiang province or in Shanghai. By excluding Li Keqiang and Wang Yang, both 67, from the party Central Committee and Standing Committee, Xi broke with the "seven-up/eight-down" rule that those aged 67 or under would remain for another five years. No woman has ever made it onto the Standing Committee. NOT TROUBLE-FREEThe run-up to the party congress was hardly smooth, with China facing sharp economic slowdown, frustration over zero-COVID and worsening relations with the West.

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