Morning comments from Sean Callow, Senior currency strategist at Westpac
- There could be some jitters on the CNY fixing today
(ps, Due at 0115GMT) ... "often a couple of minutes later"
Back to Callow's comments ....:
- Under the new system, the starting point for today's fixing should be the USD/CNY 6.3250 close.
- This would be 1.5% above yesterday's 6.2298
- A higher fixing could be justified by USD price action in London/NY
- This might be enough to spark renewed AUD, NZD and Asian FX selling
More:
- While we can appreciate the notion of selling AUD on fear of what China's move says about its export outlook, overall we don't view the CNY change as a major negative for AUD
- The yuan will now be more market-driven, so China will accumulate fewer AUD as part of its reserves but so too will it be less inclined to intervene to sell reserves including AUD at times of broad USD strength