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Onshore USD/CNY Spot Gaps Lower, Back Under 7.2000 Post Stronger CNY Fixing

CNY

USD/CNY spot has quickly gapped lower at the open, following the stronger than expected CNY fixing. Per Bloomberg onshore spot hit a low of 7.2040, before stabilizing briefly, but the pair is now back sub the 7.2000 level, last 7.1970

  • For onshore spot this completely unwinds Friday's sharp bounce.
  • For USD/CNH we are back towards the 7.2450 region, so a still a reasonable basis with spot USD/CNY. Focus in this pair could be on mid Feb highs near 7.2335/40. Mid Jan highs were at 7.2320/25. Earlier highs for the pair were at 7.2820.
  • To recap, the USD/CNY fixing result clearly pushes back on notion on further yuan depreciation pressures in the near term.

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