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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CNH
The USD/CNY fix printed at 6.8486, versus a market estimate of 6.8542 (BBG survey).
- Today's fix is another decent downside surprise, in USD/CNY terms of -56pips. This comes after yesterday's -120pip outcome.
- The last two days have delivered a cumulative downside surprise of -176pips, the largest since 2019. On a rolling 5-day sum basis we are at -216pips, see the chart below. During early 2020 we get to wider levels on this metric, although not by much.
- Unlike yesterday, today's fixing outcomes hasn't produced a sharp reaction in USD/CNH. The pair moved sub 6.8500 initially but we are now back at 6.8550. As we noted earlier, broader USD sentiment is stronger amongst the majors, which is likely helping keep USD/CNH dips supported.
- Nevertheless, we might see a range bound environment persist in the near term, as the authorities lean against depreciation pressures more forcefully. Note post yesterday's fix the pair couldn't get much above 6.8650, while on the downside, dips towards 6.8460 were supported.
Fig 1: USD/CNH Versus 5-day Rolling Sum Of USD/CNY Fixing Error Term
Source: MNI/Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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