To the Chinese yuan
Continuation of the China narrative we've seen all day:
- PBOC sets USD/ CNY mid-point today at 6.8322 (vs. yesterday at 6.7942)
- China State Council body: external uncertainties increasing
- "Currency ranges were disappointing in Asia apart from the yuan which did the rock thing (drop like a). The People's Bank of China set a lower reference rate for the onshore yuan against the USD, taking it back again to May 2017 lows. Offshore yuan had weakened going into the daily setting and both onshore and offshore followed through with a further declines."
My 2 cents:
- Chinese Yuan extends losses, reaching fresh new lows. Again.
- That's the EIGHTH weekly drop.
- The longest number of weekly drops since the start of China's modern foreign exchange rate regime in 1994.
- Even on the back of setting the reference rate against the dollar higher (see Eamonn's link above)
- The trade war thinking is that as the US imports more from China, than China does from the US, this garbage will cause more pain to the Chinese. No matter how much they talk a big game, the numbers don't lie.
Chart musings:
- Technicals obviously don't mean much here...
- But you can see how much it's weakened, and continues to weaken, against the USD.
