PBOC Boosts FX Forwards Trading Reserve Requirement to 20%

The Bank of China has increased the FX forward reserve requirement to 20%, impacting US currencies and the offshore yuan rate. Richard Jones, a Bloomberg strategist, discusses the expected pullback in the dollar and its broader impact on other major currencies. The move is seen as part of the PBOC's ongoing efforts to manage speculation on the offshore yuan, though the exact outcomes remain uncertain.

What immediate effect did the Bank of China's increase in FX forward reserve requirement have?

• Strengthening of the US dollar

• Increase in the euro value

• Immediate reaction in US currencies and offshore yuan rate

• Stability in the currency market

According to Richard Jones, what is the expected trend for the US dollar?

• Stability in the market

• Strengthening against the euro

• Pullback against various currencies

• Increase against the pound

Which currencies did the US dollar weaken against, as discussed by Richard Jones?

• Only the Chinese yuan

• The pound and euro

• The Japanese yen

• The Indian rupee

What is one of the possible reasons for the PBOC's recent actions?

• To stabilize the euro

• To encourage foreign investment

• To curb speculation on the offshore yuan

• To strengthen the US dollar

What is the current state of the currency market according to the discussion?

• Declining steadily

• Choppy and uncertain

• Stable and predictable

• Rapidly strengthening