The theme early in the week was that Chinese officials were reluctant to react to softer growth but that proved to be wholly untrue as the PBOC injected 500 billion yuan in a surprise move. The US dollar sank on the headlines and dovish commentary from Hilsenrath. The Canadian dollar was the best performer after Poloz said a domestic pickup appears underway. 2 new GBP Premium trades
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Fears that China wanted to wring out some of the excesses in the lending sector were put to sleep by the massive injection from the PBOC into the 5 largest lenders. It's good news that officials are willing to act but it's also worrying that they felt the need to react so strongly.
As always with China, there's a lingering feeling about what we don't know. There was talk about added liquidity in Asia but the size of the move didn't become apparent until US trading and it quickly sent the Aussie nearly a cent higher to 0.9113.