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PBoC Fix & Touted Buying Of Yuan By State Banks Supports Yuan After USD/CNH Tested 7.25

CNH

The run higher in USD/CNH stopped just in front CNH7.2500 in Asia-Pac hours, with a slightly more forceful PBoC lean against further weakness (albeit not large by historic terms with the USD/CNY mid-point fixing showing 111 pips below the BBG survey median) and RTRS reports suggesting that “state banks sold dollars against the yuan” providing the most meaningful signs yet that authorities have started to get a little uncomfortable with at least the speed of the recent run lower in the value of the yuan. Spot last deals around CNH7.2170, a little over 300 pips off the fresh YtD highs.

  • The pair remains above the uptrend channel that was respected from February until last week (on a closing basis), with any break above the psychological CNH7.2500 mark opening the way to the 28 Nov ’22 high (CNH7.2592).

Fig. 1: USD/CNH

Source: MNI - Market News/Bloomberg

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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