Newswires reported over the weekend on moves from Chinese authorities to limit yuan trading.

Reuters reported that the China Foreign Exchange Committee (the CFEC operates under guidance from the People's Bank of China) proposed a plan to limit speculative foreign-exchange trading and volumes at Chinese banks' proprietary desks.

Bloomberg followed up with banks have were advised to better track their proprietary trading and improve risk management:

  • banks should review trading volumes at proprietary desks when volumes deviate significantly from the normal levels (saying a 50% higher level than during the same quarter a year earlier, or more than 15 times the size of transactions done on behalf of clients, could be considered abnormal)


This comes after the yuan has surged, not just against a strong USD but against its basket comparison.

Weekly candles showing the offshore yuan strength:

Weekly candles showing the offshore yuan strength: