China's onshore yuan reference rate to a near 4 year high, TWI even stronger

Post is here:

• PBOC sets USD/ CNY central rate at 6.3246 (vs. estimate at 6.3253)

The 'basket' however, i.e. the CNY weighted against major trading partners, hit 103.5, which was its highest since August of 2015.

• The basket contains the currencies of 13 of China's major trading partners
• It was set at a 100 base as of the end of December 2014
• The China Foreign Exchange Trade System (CFETS, a unit of the PBOC) manages the basket

There has really be no let up in yuan appreciation despite official remarks about it stabilising. A stronger yuan will weigh on Chinese exports, but with the external sector is better shape than the domestic a higher currency gives the People's Bank of China some protection against inflation and allows them to hold the line on further easing policies.