USD slid from the multi-week high, China witnesses unexpected credit growth
USD slid from its multi-week high on Friday, with DXY Index dropping from around 92.5 to 92.1. Safe-haven currency JPY has also declined, with the market favoring riskier currencies in emerging markets. As the 10-year Treasury yield declining for 8 straight days, analysts are suspecting that investors are picking up their risk appetite in the short to mid-term.
China cut down the amount on cash reserves required for banks last Friday. This act was probably to help small firms cope with rising costs, especially costs from raw materials. CNY slightly rose against USD after the announcement. Bank loans rose more than expected in June; broader credit growth also picked up significantly. The total amount of loans in June landed at 2.12 trillion yuan ($327 billion), compared with the expectation at 1.8 trillion yuan.