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PBOC and USD/CNH drop helps to spur AUD/USD above 0.6550

This time last week the USD/CNH (Dollar versus the offshore Chinese Yuan) was trading above 7.30. It has fallen quite markedly since then and earlier today it dropped to 7.1630. That dollar fall has not been lost on the USD/JPY and in part explains the fall, close to 148 in the USD/JPY since my last update. What it has also done is to boost the AUD/USD. The AUD/USD closed in the US on Friday at 0.6515. It has reached a high so far today at 0.6563. It is backing away from that high right now, but this rebound has taken the Aussie to its best level since October 8. In the process it has taken it one step closer to its 200 day moving average (in place today at 0.6592) . So, that still remains a hurdle on the topside yet to be overcome. The reason for the rebound in the AUD and the CNY seems largely due to reports earlier concerning the PBOC (Peoples Bank of China) and the beleaguered Chinese property market. Leaving aside the positive funding headlines in that regard, this market remains a key concern for the Chinese and global markets and one that will not be easily papered over by the Central Bank. Meantime, the AUD/USD is currently trading at 0.6548

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