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Some Will Flag Today's USD/CNY Mid-Point Fix As A Signal

CNY

With today's USD/CNY mid-point fixing a touch more than 20 pips above broader estimates (21 pips vs. the BBG median), some may argue that the central bank is looking to promote FX stability and limit strength in the CNY. We aren't in that particular camp when it comes to today's fix, given that the deviation is of course fairly trivial when compared to the extremes witnessed in the past (and the generic employment of a 20 pip line is questionable, in our view). PBoC rhetoric re: the matter has been deployed in recent days and there are other steps available to the central bank before it employs the USD/CNY mid-point fix as its weapon of choice to stem CNY strength. We will write a little more on broader CNY strength in an upcoming bullet.

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

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