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Dollar-Yuan:### POV: USDCNY TO BREAK.......>

CHINA FX
MNI (London)
CHINA FX: Dollar-Yuan:### POV: USDCNY TO BREAK BELOW 6.20?
-Market sentiment to USDCNY continues to weaken and it could drop below the key
6.20 level if the dollar index (DXY) falls below 87.6
-The PBOC continues its tolerance to the sharp appreciation. Yuan central parity
rate stood at 6.2882 on Wednesday, having surged 2460 pips YTD.
-Strong positive market sentiment on long-term yuan appreciation has not formed
yet. The dollar demand from market players has increased at lower levels.
-The PBOC's stance on liberating the yuan exchange rate is, in the short term,
still ambiguous. It is likely to step in by restarting the counter-cyclical
factor if the trade surplus narrows at a fast pace.
-Expectations of a strong yuan would attract more inflows via both direct
investments and portfolio investments. Some of this could be hot money from the
regulators' perspective and could trigger a reaction. 
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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