Yuan to 3 month high as the Pboc squeeze is on

The Chinese yuan rose sharply on Friday morning in the offshore market, hitting its highest level in three months, as traders suspected the People’s Bank of China (PBOC) had intervened to prop up the currency and squeeze short sellers to defy the downgrade of China’s credit ratings by Moody’s Investors Service.

In Hong Kong, the US dollar lost as much as 0.2 per cent against the offshore yuan, trading at 6.836, the worst level since February. By 11.30 am, the US dollar bought 6.83401 yuan, down 0.1 per cent from 6.849 late Thursday.

The spot yuan also advanced in Shanghai. The US currency traded at 6.8579 per yuan at 11.30 am, down 0.2 per cent from 6.8685 late Thursday.

“In defiance to the Moody’s downgrade, the state-owned banks are big sellers of the dollar as the PBOC wants its currency strong and stable,” said Stephen Innes, senior trader at Oanda Asia Pacific.

South China Morning Post

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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