ANZ on the impact of the People’s Bank of China rate cut announcement on the yuan in a research note today - in brief:

RMB: RATE CUT TO PRESSURE YUAN

·Interest rate cuts in China have tended to lead to yuan depreciation.

·Despite an easing in capital outflows in October, there is still genuine onshore demand for dollars. The latest rate cut may see some pick-up in outflows.

·The failure of the yuan to gain from the ECB inspired risk rally is also another indication that near-term depreciation pressure remains.

ANZ provide a chart of how the renminbi behaves after a PBOC rate cut announcement