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State Owned Banks Reportedly Supporting The Yuan

CNY

Reuters headlines have crossed that China state owned banks have been swapping yuan for the USD in the onshore market then selling USD/CNY spot.

  • Reuters noted that the moves were potentially designed to encourage more exporter conversion of earnings back into CNY. The aim is to boost CNY into year end. Reuters noted similar flows were evident towards the end of Nov.
  • This comes as the USD/CNY down move has stalled somewhat in recent weeks. Spot USD/CNY was last around 7.1450. Recent lows from late Nov came in at 7.1177. Moves above 7.1500 were drawing selling interest through late Nov.
  • For USD/CNH we were last just above 7.1500, off recent highs in the 7.1550/70 region.

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