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USD/CNH Edges Higher, As Weaker Equities Offset Reports Of Onshore State Bank Dollar Sales

CNH

USD/CNH sits in the 7.2215/20 region in latest dealings. Earlier lows were close to 7.2150. Headlines crossed from Reuters a little while ago that the state banks were reportedly selling USDs onshore to curb yuan weakness. Spot USD/CNY hit a low of 7.2027 earlier but we now sit higher in the 7.2070/80 region. This, coupled with the re-widening of the fixing error, suggests the authorities don't want to see a rapid move higher in USD/CNY. Onshore spot hasn't gone above July 19 highs of 7.2270 in this most recent round of USD strength.

  • Some offset has come from a weaker equity tone into the lunch time break. The CSI 300 is down -0.22%, the headline HSI is also weaker. Northbound stock connect flows are negative for the third straight session at this stage (-1.16bn yuan).

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