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Yuan Weakens; USD/CNH Above 6.40

CNH

Offshore yuan is slightly weaker, USD/CNH rising above yesterday's high – the pair last up 20 pips at 6.4012 after seeing resistance at the round figure 6.40 yesterday.

  • There were reports in the China Securities Journal that analysts say expectations of yuan appreciation have abated, noting yuan is under pressure from seasonal FX demand from overseas-listed Chinese companies for dividend payments. Bloomberg calculations indicate Chinese firms listed in Hong Kong are expected to pay about $16.8bn of dividends in June, approximately $10bn more than the previous month
  • Elsewhere US President Biden signed an order yesterday which amends a ban on US investment In Chinese companies, extending a Trump era policy. The ban names 59 firms involved with China's military including Huawei and major telecoms companies.

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