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Canada has announced that the meeting between the Canadian Minister in charge of Canada-U.S. trade relations and U.S. Trade Representative Greer has been postponed to 11:30 a.m. ET today (11:30 p.m. Beijing time).The World Bank projects that Lebanons inflation will rise to 17.5% by 2026.On August 21, the Munich-based Institute for Economic Research stated that nearly a quarter of German companies are facing a shortage of skilled workers. The institutes survey showed that in July, 23.2% of surveyed companies reported a lack of qualified skilled workers, up from 21.1% in April, but below the long-term average of 31.7%. By industry, the shortage of skilled workers has intensified significantly in the telecommunications sector, with the proportion of companies reporting this problem surging from 16.3% in April to 31.1% in July; in the consulting and auditing sector, this proportion rose from 52.4% to 64.7%; and in the manufacturing sector, the proportion of companies reporting a shortage of skilled workers was 18.7%, an increase of 4.5 percentage points from April.World Bank: Lebanons economy is projected to contract by 6.4% in 2026.On August 21, an Axios analysis showed that oil prices are increasingly less responsive to Trumps social media posts about the war with Iran. Oil analyst Ben Cahill stated that in the initial weeks of the war, there was an "information vacuum" and high uncertainty regarding US policy and objectives. The market "overreacted" to a large number of posts. "For months, the market has been ignoring posts on social media because they simply dont reflect reality," he said. Many of Trumps statements about the situation in the Strait of Hormuz, policy, and war objectives have "zero correlation" with actual traffic volume in the strait. Cahill stated, "In the initial months, I thought the White House was quite successful in controlling the narrative and keeping oil prices low. But thats no longer the case."

As the value of the U.S. dollar drops significantly, the value of the Chinese Yuan appreciates

Daniel Rogers

Aug 23, 2022 14:56

 截屏2022-08-23 上午10.28.09.png

 

As Beijing increased its easing measures in response to an economic crisis and the resurgence of COVID-19, which has resulted in economically damaging lockdowns, the yuan dropped to its lowest level since July on Monday. However, bears are battling the bulls across all US dollar pairs on Tuesday, and CNH is making a comeback.

 

As of this writing, the USD/CNH exchange rate is 6.8650, which is stable from the previous session but lower than its highs. From a peak of 6.8743 in January of 2018, the price has fallen to its current low of 6.8625. The rumor mill is busy turning forth new predictions about impending budget cuts. In its most recent monthly meeting, the PBOC decided to lower the prime rate on one-year loans by 5 basis points, to 3.65% from 3.7%, and the rate on five-year loans by 15 basis points, to 4.3% from 4.45%, so reducing the cost of existing loan payments. When hearing that interest rates have been lowered by authorities, however, the general consensus was that this was a positive development, despite the economy's overall decline.

 

We also do not expect any of these cuts to have an effect on the economy, with GDP growth still on track to fall below the official "around 5.5 percent" aim. Analysts from TD Securities have suggested that far more substantial governmental intervention is required to reverse the existing pressures on the housing market.

 

To make up for MLF maturity, China may reduce RRR this year, according to a report in today's Securities Times of China. The study suggests that if the RRR is lowered, prime lending rates will fall as a result. Take note that this is a government agency reporting on such concepts. Such words from the state-run news agency could continue to weigh on the yuan and provide support for the dollar in light of growing policy divergence between the United States and China and worries over eroding economic fundamentals.

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