What happened? On Monday, February 21, Russian President Vladimir Putin signed decrees recognizing the sovereignty of the Donetsk and Lugansk People's Republics…
China's FX reserves report surprise revenue
In June, China's FX reserves suddenly rallied, underpinned by a soar in the value of its American Treasury holdings in rather a volatile month for China’s markets that were affected by worries about a China-US trade conflict.
In June, reserves tacked on $1.51 billion hitting $3.112 trillion in contrast with May’s sink of $14.23 billion, as major bank data revealed on Monday. Financial analysts surveyed by Reuters had hoped for a decline in China’s FX reserves by $10.6 billion to about $3.10 trillion.
As China's State Administration of Foreign Exchange disclosed, the small leap in reserves could be explained by asset price changes, although it didn’t come up with details.
Market experts pointed to the performance of American bonds in June. By the way, these bonds are supposed to make up a considerable portion of China's reserves.
Worries as for a global trade conflict turned out to be among the reasons in June, which powered investment flows into safe haven assets, including American government bonds.
China appears to be the largest holder of American government debt. As a matter of fact, in April, its holdings headed south to $1.182 trillion from May’s outcome of $1.188 trillion, as data from the US Treasury Department disclosed. China also injects its reserves in other American instruments and also sovereign debt of other countries.
Simultaneously, in June, the USD index edged up a bit, soaring by 0.7% in contrast with a steeper revenue of 2.3% in May. That’s what Thomson Reuters data uncovered.
In June, the total impact of a soaring evergreen buck on foreign exchange reserves didn’t appear to be as big as in May.
China's currency as well as equity markets had found themselves on edge ahead of July 6, exactly when American duties on $34 billion worth of China’s products kicked in. The Chinese government has responded with duties on American goods of the same value.
Hong Kong’s HK 50 index rose and the Chinese yuan edged up as traders assess the outcome of the first virtual meeting between US President Joe Biden and Chinese leader Xi Jinping.
The last week was so eventful for traders: FOMC Meeting, Bank of England’s rate decision, the OPEC+ meeting, and also NFP. This week is going to be interesting as well! Let’s see what you should focus on.
The United States will publish the Preliminary GDP on Thursday, May 26, at 15:30 GMT+3.
The Reserve Bank of New Zealand will publish a monetary policy report and make an update on the interest rate on May 25, at 05:00 GMT+3.
The Australian Bureau of Statistics will announce the updated Unemployment Rate and Employment Change data on Thursday, May 19, at 04:30 MT.