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Asian currencies diverged as the yen and yuan moved in different directions. The PBOC had surprised markets the prior week by cutting key interest rates, and the yuan was fixed at its weakest level in a while.
Chinese bond yields hit record lows.
Monetary easing and a weaker yuan reflect Chinese efforts to support growth, but weak currency conditions can reduce purchasing power for imported feed inputs. The effect on grain and meal prices is indirect.
reuters.comJamie McGeeverJul 31, 2024After 991 past macro events, Chinese Yuan (CNY per USD) moved a median -0.0% over 5 sessions (49% higher; middle half -0.3% to +0.3%), and -0.1% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Reuters piece dated the move day describes the yen and yuan diverging after the PBOC rate cut, directly relating to yuan direction on 2024-07-31; the CNY per USD fall (yuan strength) fits a surge alongside the yen.
