ForexLive Asia-Pacific FX news wrap: PBOC sets CNY even weaker | Forexlive

Reserve
Bank of Australia Governor Lowe spoke today after the bank raised its
cash rate again yesterday. Lowe didn’t add much to his statement yesterday.
In a nutshell the RBA has renewed concerns about inflation, and wage
growth accompanied by declining productivity, and will thus raise
rates again if needs to. Which seems likely given the stickiness of
inflation.

Also
from Australia today were January – March economic growth data. The
q/q and y/y rates were both disappointing, missing low estimates. The
details on the data were ugly. To mention just two:

the
household saving ratio fell to its lowest since June 2008
productivity
fell 0.3% in the quarter to be down 4.6% over the year (the RBA is
right to be worried about wage rises in the absence of productivity
growth, this has implications for higher inflationary pressure).

Apart
from the Australian focus, there was little else. The People’s Bank
of China set the reference rate for onshore yuan at its weakest (for
CNY, highest for USD/CNY) since December 1 last year. The PBOC’s
persistent affirming of the slide for the yuan is a form of stimulus
for the country’s export sector. As I post we are awaiting May trade
data from China.

Asian
equity markets: