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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
- China's FX regulator SAFE states the FX market has operated steadily across August, with CNY expectations broadly stable for now.
- The headlines follow clear concern around yuan depreciation among the China authorities, with today's fixing being the weakest relative to expectations since early 2020 at -120pips.
- Historically, the fixing trend has been used to slow the direction of the CNY rather than alter the trend. The market may still feel relative fundamentals are skewed towards higher USD/CNH levels, particularly with further monetary easing possible from China before year end.
- Overnight, we wrote Market Implied Probabilities Still Suggest USD/CNH Can Breach 7.00 Before Year-End: https://marketnews.com/market-implied-probabilitie...
- Nonetheless, the CNH NEER FX rate is little changed across August and remains well off the YTD lows printed in May, which may soothe concerns among the Chinese authorities for now:
Figure 1: CNH NEER remains above YTD lows
Source: MNI/BBG
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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