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CNY Fixing Strongest On Record Relative To Estimates, But Little CNH Follow Through

CNH

The USD/CNY fixing came in at 6.9160, versus a Bloomberg consensus of 6.9614.

  • Today's fix is a -454 pip surprise in USD/CNY terms. This is the largest downside surprise since Bloomberg started compiling consensus estimates (back to 2018).
  • The rolling 5-day sum of the error term is now at -1083pips, compared with -806pips yesterday. This is also fresh wides for this metric, see the chart below. This is a clear step up from a fixing bias standpoint relative to the past 2 session.
  • The authorities may view a breach of 7.00 as inevitable though. The onshore Securities Times stated in a front-page article today that the PBoC is more concerned about the pace of depreciation rather than specific levels. It also warned on betting against one-way moves in the currency.
  • USD/CNH has moved lower post the fixing, but remains above 6.9700 for now (last at 6.9750). Earlier highs were just above 6.9830. Overall, not a great deal of follow through to the downside in the pair.
  • Coming up later today is August trade figures and FX reserves.

Fig 1: USD/CNY Fixing Error Term to Fresh Wides

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The USD/CNY fixing came in at 6.9160, versus a Bloomberg consensus of 6.9614.

  • Today's fix is a -454 pip surprise in USD/CNY terms. This is the largest downside surprise since Bloomberg started compiling consensus estimates (back to 2018).
  • The rolling 5-day sum of the error term is now at -1083pips, compared with -806pips yesterday. This is also fresh wides for this metric, see the chart below. This is a clear step up from a fixing bias standpoint relative to the past 2 session.
  • The authorities may view a breach of 7.00 as inevitable though. The onshore Securities Times stated in a front-page article today that the PBoC is more concerned about the pace of depreciation rather than specific levels. It also warned on betting against one-way moves in the currency.
  • USD/CNH has moved lower post the fixing, but remains above 6.9700 for now (last at 6.9750). Earlier highs were just above 6.9830. Overall, not a great deal of follow through to the downside in the pair.
  • Coming up later today is August trade figures and FX reserves.

Fig 1: USD/CNY Fixing Error Term to Fresh Wides

Keep reading...Show less