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CNY Fix - Modest Upside Surprise

CNH

The CNY fix printed slightly stronger than expected. The market expected the USD/CNY fix at 6.7539, while the actual came in at 6.7524.

  • Once again today's fix delivered only a modest surprise, -15pips in USD/CNY terms. This contrasts with yesterday's +21pip surprise. For the week, the cumulative downside surprise is a very modest -5pips.
  • USD/CNH has drifted lower post today's fix. We now sit around 6.7750, but this is in line with broadly softer USD sentiment. We got close to 6.7900 in earlier trade. Equity sentiment and USD trends remain a bigger driver of USD/CNH for now.
  • Arguably the China authorities remain happy with a broad range trade in USD/CNY.
  • Implied vols, while having ticked up, remain below recent highs (6.90%, versus 8.25% high), likewise for risk reversals. Onshore trading volumes also ticked down yesterday.

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