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China FX Rallies Further on Perceived Endorsement for CNY Strength

CHINA
  • CNH continues to appreciate, with USD/CNH breaking through to fresh multi-month lows and narrowing the gap with 6.3525, the late May high. The run higher in CNH/JPY has been even more notable, with the cross topping 17.90 - the highest level since January 2016. The cross has rallied 6.5% off the late September low.
  • In USD/CNY, some analysts wrote this morning of the significance of the Beijing closing print below 6.40 (official close was 6.3998), which may be an indication that the pullback in the pair has been endorsed on an official basis.
  • This raises focus on tomorrow's early fix which, if below 6.40, could open the door to further selling pressure.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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