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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.
CNY
Spot USD/CNY has drifted higher since the onshore open, the pair was last near 7.2450, slightly above Monday session highs. This is line with a modest firming in the fixing result over the past week since we pushed above 7.1000. The chart below overlays onshore spot against the fixing trend.
- Modest yuan depreciation may continue to be accepted by the authorities. Onshore spot remains sub 2023 highs near 7.3500. The CNH-CNY basis has also narrowed, with tighter liquidity helping to curb appetite for CNH shorts. USD/CNH was last near 7.2525.
- The next domestic focus point will be next week's April PMI prints. China growth expectations have firmed in recent weeks, although the broader sell-side consensus still appears to biased for a weaker yuan.
- The authorities stated last year that they were prepared to wait out the stronger USD backdrop as the Fed cycle should eventually turn.
- Such a scenario may remain the playbook, although as we approach Q4, US election risks will also come under focus.
Fig 1: Spot USD/CNY Spot & USD/CNY Fixing Trends
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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