The People's Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.

  • USD/CNY is permitted to trade plus or minus 2% from this daily reference rate.
  • CNH is the offshore yuan. USD/CNH has no restrictions on its trading range.
  • A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.
  • The previous close was 6.3866
  • Friday's reference rate was 6.3825

The setting from the PBOC is significantly weaker for the CNY than was expected. Over the weekend the PBOC expressed a desire to slow the rise of the yuan:

PBOC injects 50bn yuan via 7-day reverse repos

  • 10bn yuan mature today

  • thus a net 40bn drain in open market operations (OMO)