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USD/CNY Back Sub 7.3000 On PBoC Headlines, Reported State Bank Selling

CNY

Spot USD/CNY last tracked near 7.2990, slightly above earlier sessions lows (~7.2913). Recent highs in the pair rest above 7.3100. The PBoC has held its Q3 monetary policy meeting, vowing to keep yuan basically stable and curb excessive moves. This is similar to previous rhetoric on the currency. Headlines have also crossed from Bloomberg that state banks have been USDs onshore to boost the yuan.

  • The PBoC also noted that it will conduct monetary policy in a precise and forceful manner. The focus will also be on expanding domestic demand and promoting the healthy and stable development of the property industry.
  • China equities are firmer in early trade, while the HSI in HK is up around +1.0%, sitting close to session highs currently. Property developer names are rebounding.
  • For USD/CNY, earlier September lows rest under 7.2500. Note the upside ceiling today post the CNY fixing is ~7.3151. The actual fixing moved down a touch to 7.1717, well below market estimates above 7.3000.
  • USD/CNH is also comfortably off earlier highs (7.3174), last near 7.3025, although we haven't been able to breach 7.3000 yet.

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