The PBOC set the dollar's reference rate at CNY7.1688. It is the biggest change in the fix this year and the lowest reference rate for dollar since shortly after the US election last November.
On Sunday, China’s State Council launched a special action plan to boost domestic consumption, including raising household incomes and setting up a childcare subsidy scheme.
The Elliott wave structure of the Dollar Index shows that prices are still in wave four, which could retest higher resistance levels around 104.30 to 104.80 before the downtrend resumes.
The yen’s fortunes may reverse in the day ahead, with mid-week rate decisions out of either side of the Pacific, along with Japan’s inflation data due before the weekend.
The USD/CHF exchange rate moved sideways on Monday morning as focus among investors shifted from the upcoming Swiss National Bank and Federal Reserve interest rates decisions.
Risk assets are a little calmer at the start of a new week. US Treasury Secretary Scott Bessent has tried calming some nerves by calling equity corrections healthy.
The euro was once again the strongest major currency last week, while the Swiss franc was the weakest. Volatility decreased during this time, as only 11% of the most important Forex currency pairs and crosses changed in value by more than 1%.
The euro rallied once again during the course of the week, yet it now seems to be struggling at the 200-week EMA. It also seems like the 1.09 level could be offering a significant amount of resistance.
