SHANGHAI, Aug. 13 (SMM) – The PBOC lowered the central parity of RMB:USD further yesterday. Fed official said this may affect their plan for an interest rate hike, pushing down the US dollar to a five-week low of 96 and in turn driving up base metals.
The central parity of RMB:USD was lowered by 1,008 basis points to 6.3306 yesterday. The RMB：USD dropped by nearly daily limit at one point, though rallied and closed at 6.3870. Analysts said RMB had been overvalued. It was reported Chinese government entered the market before the end of trading to help arrest RMB declines. The PBOC pointed out the RMB will not continue to depreciate. Investment in China’s property market in the first seven months of the year was up 4.3% YoY, with the growth down 0.3% from the first six months. Value added at large industrials rose 6% YoY, with the growth down 0.8% from June. The NBS attributes this to sluggish overseas demand and falling exports.
New York Fed Chairman said China’s intervention in currency market has exerted a strong influence in global economy, and suggested a slower interest rate hike. Dealers expect there is a 40% chance the Fed will hike interest rate at its September policy meeting. The US dollar index thus closed down 0.9%. The EUR:USD rose to 1.12.
Non-USD currencies stabilized against the US dollar. Gold prices reached USD 1,120 oz. Crude oil prices, however, stayed at a low. LME base metals price rebounded.