020 7898 0500Elsewhere yesterday, we saw significant developments from the People’s Bank of China (PBoC) as the Governor announced the central bank would basically end “normal foreign-exchange market intervention”. For most of its history, the Chinese renminbi has been pegged to the US dollar. Although that fixed rate has been altered a handful of times, the Chinese central bank has always intervened in order to control the value of the currency. Yesterday morning it was announced that the PBoC will remove itself from day-to-day interventions, allowing the currency to float on the foreign exchange market, with the trading range being widened in ‘an orderly way’ (i.e. a gradual floatation with no specified time frame). It is too early to forecast what this will do to the value of the currency, but it promises to be an interesting situation and one to keep an eye on. In other news we saw the Canadian dollar and Russian rouble lose ground against the majority of their most-traded peers as futures of crude oil, the nations’ biggest exports, hit the lowest price in 5 months. The South African rand also weakened, halting 4-day gains following the announcement from a state-owned power utility company that there is a significant risk of blackouts over coming months. Today is a quiet day data-wise, but tonight the Governor of the Bank of Canada will give a speech. Get in touch with your trader for a live rate.
