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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 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
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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