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USD/CNH Back Sub 7.3000, Near Thursday Lows

CNH

(MNI Australia) USD/CNH is back under 7.3000, last near 7.2980, not too far off Thursday session lows at 7.2970.

  • There is little in the way of local event risks today, although some focus is likely to rest on the USD/CNY fixing. Yesterday saw a large -918pips down surprise in USD/CNY terms. This was very close to the widest fixing error from 2022, which came in at -950pips last October.
  • Whilst onshore spot closed at 7.2866, the input for today's fixing (the 4:30pm onshore spot level) was fairly elevated at 7.3103. Broader USD indices were relatively steady as well.
  • So, this may keep the fixing error wide today, as the authorities push back against yuan depreciation pressures.
  • The other factor the market may be mindful of is further policy steps to curb yuan weakness/drive greater stability, which the PBoC highlighted it has ample tools to do so in its quarterly monetary policy report released late yesterday.

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