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.
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