IMF adds yuan to its list
In a decision that surprised no one, the International Monetary Fund’s executive board announced yesterday that China’s currency would join the basket of reserve currencies beginning October 1, 2016. The yuan will now make up 10.92% of the IMF’s SDR (Special Drawing Right) system, edging out the British pound and the yen. It is mainly the euro’s share that was trimmed to make room for the yuan, dropping from 37.4% to 30.93%. Eventually, this should apply upward pressure to the CNY and represent yet another source of downward pressure on the EUR.
A number of manufacturing indexes have been updated in the past few hours. In short, readings are down in China and the United Kingdom, while the eurozone is improving, helping the EUR win back a few points against the USD. This morning, we will be keeping an eye on Canadian GDP numbers at 8:30. Markets anticipate an annualized increase of 0.4% for September, which could make for a
loonie-friendly morning.
