FX and Gold weekly outlook: Chinese economy faces downward pressure.

Byline: ASAD RIZVI

ECB rate cut and BOE's liquidity injection on same day should not be a big surprise, as both were due for its monetary policy announcement. But the biggest surprise of the day came when Peoples Bank of China (POBC) announced cutting its rate 31 basis points (bps) to 6 percent, slashing its 1-year deposit rate by 25 bps to 3 percent and lowered the floor for lending rate to 70 percent of benchmark rate from 80 percent.

All three announcements were minutes away from each other strengthening market belief that this is a co-ordinated effort. There is surly some sort of urgency, as China has earlier slashed its rate on June 7, hardly a month ago. Economic data of recent months shows that Chinese economy is on constant decline and a quick move suggest that more economic slide could be in the …