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Fix Eyed

CNH

The yuan has continued to strengthen, USD/CNH accelerated the move on Tuesday as the greenback snapped a 3 day winning streak with a 10-year auction seeing robust demand.

  • USD/CNH last at 6.4422 vs 6.4787 at the start of Asia trade yesterday.
  • Markets await the fixing from the PBOC which could add further downside pressure to the pair should the PBOC allow yuan to strengthen. The fix has weakened the yuan for 4 consecutive days, but this didn't translate into weaker price action. On January 6 USD/CNH was approaching 6.43 when the PBOC surprised markets by weakening the yuan at the fix in a signal they were unhappy with yuan strength amid rumours state banks had been buying US dollars at the central bank's behest.

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