The People’s Bank of China (PBoC), after having reached agreements with the central banks of the U.S., England, Australia, New-Zealand and Japan, has just authorized direct trading between the yuan and the euro. The trading volumes of 110.4 billion yuan between the euro and the yuan are currently small potatoes, compared to the 12.2 trillion in trading volumes occurring between the greenback and the yuan. Nevertheless, euro trading volumes will probably expand over time, based on Chinese trade with the EU which grew by 12% in the past 12 months.
• For its part, the euro continues to lose ground against other major currencies. The European Central Bank’s strategy seemed to be working regarding the devaluation of its currency, which should boost European exports. However, its bond purchase programme has received up to now a lukewarm response from European banks, which appear skittish in using it.
• Today we are awaiting U.S. Personal Consumption Expenditure and Personal Income data. Have a great day!
