CNH retreats as offshore funding eases

 Christy Tan, head of Markets Strategy/Research, Asia at
National Australia Bank said the yuan's surge over the past few
trading sessions did not represent a meaningful departure from
the way the PBOC managed its currency.
    "It is probably premature to call the last 2 days' moves a
change in the FX regime," Tan said.
    It is also unclear whether the yuan's gains against the
dollar has stalled for now, with market views for a U.S. rate
hike firming due to upbeat U.S. economic data.
    Stephen Innes, senior trader at OANDA said the aggressive
yuan bears will "either go into hibernation or take to the
sidelines licking their wounds for the foreseeable future".
    Separately, the central bank-owned Financial News said on
Friday the adjustment to the mechanism the PBOC uses to set the
daily yuan midpoint was a pre-emptive move to offset the effects
from expectations of a U.S. interest rate increase this month
and the stresses of seasonal dollar demand.
    The China Foreign Exchange Trade System (CFETS) trading
platform, overseen by the central bank, said last Friday that a
"counter-cyclical factor" would be introduced into the way it
calculates the yuan's reference rate each day, allowing it to
better reflect supply and demand.


Reuters

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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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