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Yuan Weaker, Fix Above Estimates

CNH

The PBOC fixed USD/CNY at 6.5282, 3 pips above sell side estimates. Offshore yuan is holding its declines from yesterday, USD/CNH last up 38 pips at 6.5329, taking another leg higher post fix as the DXY rises above its 200-day moving average. The rate is now above its 100-day moving average, but below 2021 highs just below 6.58 hit on March 9.

  • The PBOC on the wires earlier said it will keep stable and moderate loan growth. The comments came after the PBOC met with banks on credit structure, the central bank also pledged to keep consistency and stability of financial policies, as well as increasing support to tech and manufacturing.
  • US Secretary of State Blinken said that the US would not provide allies with an ultimatum over China. Blinken has taken a slightly softer line than has been seen from the Biden administration, particularly after the summit last week seemed to descend quickly to finger pointing. Blinken said the US wants to out compete China, not just defeat them. Still, tensions continue to simmer as the SEC has taken initial steps to force accounting firms to let US regulators review the financial audits of overseas companies, something China has long reviewed to do. Chinese companies face delisting in the US if they fail to comply.
  • China's Beige Book was released yesterday, the survey concluded that services is the weak point in the recovery, while the retail sector is a source of strength.

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