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PBOC Rhetoric Aplenty

CNH

Spot USD/CNH has crept higher today and last changes hands +53 pips at CNH6.3855, with participants digesting PBOC rhetoric.

  • Today's yuan fixing showed little deviation from expectations. The central USD/CNY mid-point was set at CNY6.3825, 3 pips above sell-side estimate.
  • PBOC Gov Yi told the audience of the Eurasia Forum on Thursday that the central bank will keep monetary policy stable, while offering targeted support to SMEs and green projects.
  • In a statement posted on their website, China's central bank asked financial institutions and enterprises to ramp up FX risk management and refrain from one-way yuan bets. The statement noted that two-way fluctuations of the yuan is expected to be "the norm" in the future.
  • Looking ahead, the PBOC will announce their monthly Loan Prime Rates fixing this coming Monday.
  • Bulls need a clean break above Oct 29 high of CNH6.4140 to find some poise. On the downside, a slide past Nov 16 low of CNH6.3616 would turn focus to May 31 cycle low of CNH6.3525.

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