Yuan Weakens Despite Stronger Fix

Offshore yuan is weaker, USD/CNH moving higher despite a stronger than expected fix for the yuan by the PBOC. The PBOC fixed USD/CNY at 6.4621, 13 pips below sell side estimates. USD/CNH last trades at 6.4846, just below yesterday's high of 6.4681 which was the highest since May 5.

• The market should be prepared for a depreciating yuan in the near term as the Federal Reserve's hawkish turn raises the prospect of a higher U.S. dollar index, the China Securities Journal reported citing analysts. The PBOC may take various measures if the yuan is judged to be moving too quickly in either way, the newspaper said citing Zhang Ming, deputy director of the Institute of Finance & Banking at the Chinese Academy of Social Sciences.Both onshore and offshore yuan has weakened more than 1,000 points to around 6.47 after peaking in the end of May, the newspaper said.