European open: China fixes lower as Beijing prepares to widen trading bands

FXStreet (London) - Beijing cut the CNY fixing rate further overnight, down another 0.01 percent to CNY61192. The latest cut from the People's Bank of China brings the fixing to the lowest level since 20 December and comes as the PBoC prepares to widen its trading bands.

The lower fixing and yuan depreciation put pressure on the Aussie dollar on declining commodity demand concerns. Iron ore prices hit a seven-month low in a fifth-straight day of declines.

The second reading of the UK GDP shouldn't see any revisions from the preliminary reading, with a fourth quarter GDP reading of 7 percent quarter-on-quarter. Market focus will be on fourth quarter business investment, with consensus expectations for a print at 1.3 percent quarter-on-quarter. I. Addition, Bank of England monetary policy committee Ben Broadbent is set to speak this morning, following speeches from fellow MPC members Weale and McCafferty.

In the US, new home sales are expected to see further declines, with consensus expectations for a 5.6 percent drop to 390k in January, adding to last month's 7 percent drop. While the weak numbers will likely be written off as affected by the poor US weather conditions, we will need a significant rebound later into the quarter to reassure markets that the US recovery is alive and well.