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Forex Flash: China will further relax the FX trading band - BBH

FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the Chinese are set to further relax the FX Trading band.

They begin by recapping that when the strict yuan peg ended in July 2005, the +/- 0.3% trading band was put in place for USD and +/- 1.5% for non-dollar foreign currencies. Then in September 2005, the non-dollar trading band was widened from +/- 1.5% to +/- 3.0%, but USD band maintained. They see that the USD trading band was then widened from +/- 0.3% to +/- 0.5% back in May 2007. Next in April 2012, the USD band was widened from +/- 0.5% to +/- 1.0%, which is where it stands now. They write, “Looking at past patterns, a move to widen the USD band from +/- 1.0% to +/- 1.5% would seem the more natural course.”

Forex: EUR/JPY almost at 130.00 on European session

The mood is on favor of the upside as the EUR strengthens and the JPY weakens with European liquidity after Japan finance minister Aso revealing that Japan faced no opposition at G20 to its message that its monetary policy is aimed at beating deflation. The cross climbed the chart from 128.00 ground and peaked at 129.89 high, so far, where profit taking brought the price back to 128.70 (+1.22% on the day).
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Forex: USD/CHF sideways trading at 0.9315/17

The USD/CHF has refused to break out of its narrow consolidation Friday, having only moved 32 pips off the 0.9300 level during the trading day thus far. The sideways motion has still led the pair to trade negatively, though in these moments it has at least stabilized above the 0.9300 level, operating at 0.9315/17.
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