The People’s Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.
- USD/CNY is permitted to trade plus or minus 2% from this daily reference rate.
- CNH is the offshore yuan. USD/CNH has no restrictions on its trading range.
- The previous close was 6.3840
- Reuters estimate from their survey was 6.3790, Bloomberg 6.3837 …. (A rate that’s significantly stronger or weaker than expected is typically considered a signal from the PBOC).
The rate is a surprise from the PBOC, weaker than expected for the yuan. Yuan has been on a rip, the PBOC is not unhappy with this but they don’t want the pace of appreciation to run away from them.
injects 10 billion yuan liquidity via 7-day reverse repo