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PBOC Fixes Stronger Than Expected Again

CNH

PBOC continues its run of stronger than expected fixes for the yuan, USD/CNY fixed 11 pips below sell side estimates. The last time the PBOC fixed the rate above sell side estimates was April 6. So far in April the sum of the difference between estimates and fix is -54 pips, in March it was -22 pips and February was +65. This could indicate a willingness to allow the yuan to strengthen, while draining liquidity from the system at the MLF operations earlier this week was interpreted as an implied tightening move.

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