September 06, 2022 01:27 GMT
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The USD/CNY fixing came in above 6.9000, the first such occurrence in 2 years. It printed at 6.9096, versus a Bloomberg consensus of 6.9253.
- Today's fix continues the recent trend of stronger than expected outcomes, -157pips in USD/CNY terms today, although it doesn't show a more aggressive stance compared to last week.
- The rolling 5-day sum of the error term is now at -806pips, compared with -898pips yesterday. This is the first time since late August this metric hasn't widened.
- This, coupled with the fact we haven't seen fresh wides in the daily fixing error term (i.e. not beyond the -249pips surprise from last week), has seen USD/CNH push back above 6.9400 post the fixing.
- The market may have been looking for a stronger push back, particularly after yesterday's FX reserve cut. If we had of seen a fixing below 6.9000 this would have driven the error term to fresh wides for the day, that is, beyond -250pips.
Fig 1: USD/CNY Fixing Error Term Up Slightly From Recent Wides
Source: MNI - Market News/Bloomberg
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