CNY Fixing Close To Expectations

The CNY fixing came out slightly weaker than expected. The market consensus was 6.7382, versus the actual of 6.7387.

• Today's fix was an upside surprise of 5pips in USD/CNY terms. It is the first upside surprise since 18th of May. This offsets yesterday's -5pips surprise, although it's difficult to read too much into such outcomes given the consensus estimate and actual outcome are so close to each other.
• The 5-day rolling sum of the fixing error is -71pips, compared to -11 pips for last week. Whilst the fixing trend is not a key driver of sentiment at the moment, it doesn't to be standing in the way of further depreciation pressures in the near-term.
• USD/CNH is firmer post the fix, tracking slightly above 6.7800, +0.20% above NY closing levels.
• Fresh USD/CNH impetus today has come on the back of a BBG source report which noted that “the US and Taiwan are planning to announce negotiations to deepen economic ties, people familiar with the matter said, in a fresh challenge to Beijing, which has cautioned Washington on its relationship with the island.