Yuan Firms Despite Another Softer PBOC Fix

Another weaker than expected PBOC fix failed to provide any material support to USD/CNH, with the rate last operating -42 pips at CNH6.3985.

• China's central bank set their official USD/CNY mid-point at CNY6.4079, 11 pips higher than estimated.
• Caixin Services PMI improved to 53.8 in October from 53.4 prior, printing above median estimate of 53.1, with Caixin pointing to "strongest increases in activity and new orders since July."
• Premier Li signalled that the economy faces new downward pressures and argued that China needs to cut taxes and fees to alleviate the burden on small and medium-sized businesses.
• Bears look for losses past Oct 25 low of CNH6.3748, which would clear the path to Oct 19 low/trendline support at CNH6.3687/83. On the flip side, a rebound above Oct 29 high of CNH6.4104 would open up Oct 19 high of CNH6.4290.