PBOC hinting the 6% drop in USD/CNY since the end of May is enough, for now
Posting this on the People's Bank of China as an ICYMI, if you are trading yuan please check it out.
Justin broke the news yesterday of the PBOC asking banks to suspend the use of the counter-cyclical factor in its daily yuan midpoint fixing.
Check out the chart below for the extent of yuan gains since May, if these keep on China's export performance will suffer. I think its well worth paying attention to this story and we are about to see greater two-way movement of the yuan ahead. Recall also the PBOC moved in early October to make selling yuan forward cheaper. This new development builds on that. (PBOC has lowered the reserve requirements on some forward yuan FX trading.)