ForexLive Asia-Pacific FX News Roundup: Wednesday FOMC Wait Continues, FX Market Moderate

Asian foreign exchange markets once again traded in range-bound conditions pending the outcome of the Federal Open Market Committee (FOMC) meeting on Wednesday, September 20, 2023.

The flow of news and data was very light.

On the central bank side, the People’s Bank of China once again set the USD/CNY reference rate more than 1,100 points away from the modeled estimate. The Bank set the rate at 7.1733 against an estimate of 7.2839. The Bank continues to impose a stronger yuan.

We also had the release of the minutes of the September meeting of the Reserve Bank of Australia. The Bank appears determined to try to put a hawkish spin on its deliberations, but it also said that “the recent flow of data was consistent with inflation returning to its target within a reasonable time frame while the interest rate spot remained at its current level. Which strongly suggests that there will be no further rate hikes. As I mentioned previously, the next critical data point is the quarterly inflation data due from the Australian Bureau of Statistics on October 25. Until we get this data, it is best to view the November RBA meeting as a “live” meeting. We will be able to make a better assessment after this inflation data.

Asian equity markets:

• Japanese Nikkei 225 -1.2%, down sharply after a public holiday for Japanese markets

• Shanghai Composite of China -0.1%

• Hong Kong Hang Seng +0.02%

• South Korea’s KOSPI -0.3%

• Australian S&P/ASX 200 -0.5%

USD/CNH update: