Eyes on the PBOC CNY rate today after a slump in CNH overnight

The Bank of Canada Bank of Canada The Bank of Canada (BOC) is the central bank of Canada. It was created in 1934 and is responsible for implementing monetary policy in the country, issuing currency, and promoting a safe and stable financial system.The Bank's main role is to "promote the economic and financial welfare of Canada," as defined in the Bank of Canada Act. This includes maintaining the stability of the financial system, promoting a sound and efficient financial system, and fostering monetary conditions that will preser The Bank of Canada (BOC) is the central bank of Canada. It was created in 1934 and is responsible for implementing monetary policy in the country, issuing currency, and promoting a safe and stable financial system.The Bank's main role is to "promote the economic and financial welfare of Canada," as defined in the Bank of Canada Act. This includes maintaining the stability of the financial system, promoting a sound and efficient financial system, and fostering monetary conditions that will preser Read this Term move reverberated across markets Wednesday:

• Forexlive Americas FX news wrap: Bank of Canada surprises with another rate hike

The rate hike from the BOC was a surprise, but just a should pout to Scotia for tipping it, as posted yesterday:

• Bank of Canada monetary policy decision due Wednesday, 7 June 2023 - 'rate hike' preview

In the wake of the BoC hike US Treasuries lost ground

• CAD CAD The Canadian dollar (CAD) is the official currency of Canada and at the time of writing is the fifth most-held reserve currency in the world behind only the US dollar, euro, Japanese yen, and British pound.The CAD is commonly referred to as the Loonie by forex analysts and traders. At the time of writing, the CAD accounts for 2% of all global currency reserves.Its appeal is strong among central banking authorities given Canada’s economic strength, sovereignty, and historic stability.Originally i The Canadian dollar (CAD) is the official currency of Canada and at the time of writing is the fifth most-held reserve currency in the world behind only the US dollar, euro, Japanese yen, and British pound.The CAD is commonly referred to as the Loonie by forex analysts and traders. At the time of writing, the CAD accounts for 2% of all global currency reserves.Its appeal is strong among central banking authorities given Canada’s economic strength, sovereignty, and historic stability.Originally i Read this Term strengthened immediately after the decision, but gave it back
• AUD and NZD were two of the weakest majors after the announcement
• US equities had opened with a rally, but these fell away after the BoC, NQ big-time

As for the yuan, it came under pressure after yesterday's trade data:

• China May trade data, USD terms exports and imports both fell y/y.

Chinese exports and imports both came in lower than April, a sign of weak global growth momentum and soft domestic demand. This sparked, once again, speculation of policy easing to come.

Yuan slid after the data:

• Offshore yuan trades lower after disappointing May trade data from China

but slumped further overnight in line with the losses described above. USD/CNH popped above up through 7.15 for the first time this year:

Keep an eye on the People's Bank of China CNY reference rate setting today. The Bank has been following along readily with the declining yuan but too sharp a pace of fall risks the PBOC striking back to stabilise the yuan, for a few days at least. The setting is at 0115 GMT (2115 US Eastern time).

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ps.

• USD/CNY is the onshore yuan. Its 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.