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Swings Into Gain, Holds Familiar Range

CNH

Spot USD/CNH operates -24 pips at CNH6.3637, with bears looking for sales past Feb 4 low of CNH6.3489 before targeting Jan 26 low of CNH6.3238. Conversely, a jump above Jan 31 high of CNH6.3864 would bring Jan 6/Nov 26 highs of CNH6.3976/99.

  • The PBOC set the USD/CNY reference rate at CNY6.3653 today, 6 pips below sell-side estimate. The initial reaction of offshore yuan was muted.
  • A senior central bank official lashed out at local brokers for providing "illegal" cross-border trading opportunities. He accused them of allowing mainland clients to wire money abroad, while falsely claiming that the foreign exchange is used for travel purposes.
  • Looking ahead, the preliminary reading of China's Q4 BoP current account balance will be released on Friday.

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