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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.
CNH
Spot USD/CNH has edged higher after a weaker than expected (from the yuan perspective) PBOC fix and in the absence of alternative catalysts. The rate last deals at CNH6.3667, 41 pips higher on the day but still comfortably within yesterday's range.
- From a technical point of view, a swing above Jan 6/Nov 26 highs of CNH6.3976/99 is needed to generate a bullish signal, turning focus to the CNH6.4065-6.4104 area, which capped gains in November. Conversely, a fall through Dec 31 low of CNH6.3379 would bring Dec 8 low of CNH6.3305 into play.
- The PBOC set their yuan reference rate at CNY6.3542 today, 60 pips above sell-side estimate, which represents the weakest bias in a month. Some will interpret the fixing as a sign that the authorities are trying to reign in yuan appreciation.
- Note that the weaker fixing comes after the publication of in-line U.S. CPI figures triggered a round of greenback sales on Wednesday, prompting USD/CNH to extend its uninterrupted pullback from a multi-week high printed on Jan 6.
- China's monthly trade data will hit the wires on Friday, with analysts expected a slight widening in headline trade surplus.
Fig. 1: PBOC USD/CNY Mid-Point Fixing vs. Bloomberg Estimate Spread (pips)
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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