SHANGHAI: China’s yuan eased against the US dollar on Friday as global investors await a key speech from the Federal Reserve later in the day for any clues on the timing of potential interest rate cuts.
Investors are bracing for volatility as Fed Chair Jerome Powell walks a fine line between curbing inflation and supporting the labour market. Thin late summer trading could magnify any market moves to his speech in Jackson Hole, Wyoming.
Volatility across major currency pairs was stable ahead of his remarks, UBS analysts said in a note.
For volatility to rise significantly after the event, spot prices would need to break key ranges, the analysts added. “A notable move in USDCNH through 7.15-7.16 could trigger increased volatility, with vols now historically low.”
The offshore yuan traded at 7.1849 yuan per dollar, down about 0.02% in Asian trade.
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