The People's Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.
- USD/CNY is the onshore yuan. Its 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.
- A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.
The previous close was 7.2970
The difference between the modelled estimate and the actual is nearly 1200 points today. The message from the PBOC remains that its not letting the yuan fall away any further for now. The 7.1732 is the strongest for CNY since August 14.
PBOC injects 205bn yuan in open market operations (OMOs) via 7-day reverse repos (RRs) at an unchanged rate of 1.8%
- PBOC injects 86bn via 14 day RR, sets rate at 1.95%
- 65bn yuan of RRs mature today
- thus a net 226bn yuan injection on the day in OMOs
