US President Joe Biden commented on Thursday that, rising energy costs and supply chain constraints have begun to ease, but the change may not be reflected in November’s data. In other words, November’s inflation figures might be higher than expected. Currently, the expectation is at 6.8% on an annualized rate. In October the actual inflation annual growth was at 6.2%. Expecting this direction, USD has started to go down. DXY Index currently trades at 96.192, down about 0.06%.
PBOC unexpectedly raises its FX reserve requirement, affecting both onshore and offshore yuan. USDCNY is currently trading at 6.3643, down about 0.2%. USDCNH currently trades at 6.3689, down about 0.12%. The decision to raise the FX reserve requirement will encourage selling on yuan. Moreover, it also signals that Beijing has started to feel uncomfortable about its currency’s appreciation.