Forex - China Dismissive Of Their Role In Yuan Valuation

he consolidation of the USD and moderation in risk appetite continues today as a barren data schedule provides little impetus for a break out in major currency pair ranges. Today’s docket is solely occupied with policy maker speeches, but even yesterday’s offerings from Geithner, Fisher and Trichet were muted in impact on FX markets.   The most newsworthy element from Geithner’s address to the Joint Economic Committee yesterday was the palpable sense of frustration at a lack of progress on China’ attitude to yuan valuation and global rebalancing. As much as US officials may wax lyrical on the progress made by President Obama’s visit to the Far East, the fact remains that the Chinese have little to no motivation to change tack on their currency stance now, and as such, the CNY is not going anywhere. To further undermine the alleged progress US officials have made on the issue, overnight comments from China central bank Governor Zhou Xiaochaun made the analogy of China’s involvement in the currency as “like watching a tournament”. He expanded further that “We just watch the game. Regardless who wins or loses, the issue of whether the winner or loser benefits the spectator doesn’t arise”. Hardly rhetoric likely to encourage progress on the issue.   For the rest of the day, only Trichet’s speech in Frankfurt remains to watch, and of course the possible expiry of the rumoured EURUSD option structure with barriers at 1.4800 and 1.5100. All signs point to a slow day’s trading ahead.