Investor sentiment has not been helped at the start of this week by the surprise decision to leave the five-year Loan Prime Rate unchanged at 4.2%. It had been expected that it would be lowered by 15 bps similar to the decision last week to cut the medium-term lending facility rate. The last time they diverged was in August of last year. 

The one-year LPR was still lowered by less than expected by 10 bps. 

The developments still leave market participants waiting for more convincing policy measures to stimulate demand. As a result, China-related currencies remain vulnerable to further weakness in the near-term even after the sizeable adjustment that has already taken place so far this month.