HSBC say that CNY could face more headwinds from
- China’s persistent run of weak data
- and further widened yield disadvantage
And that People's Bank of China efforts to prop up the yuan are half-hearted:
- The PBoC may continue to smooth volatility, but we do not expect it to draw a firm line in the sand when the tide keeps coming in.
Also on the PBOC, the path is clear for rate cuts next Monday:
- The PBoC unexpectedly lowered the rate on its one-year loans, or medium-term lending facility (MLF), by 15 bps to 2.5%, together with a reduction of 10 bps in its 7-day reverse repurchase rate (a short-term policy rate) to 1.8%.
- The rate cut opens room for a reduction in 1-year or even 5-year loan prime rates on 21 August.
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ICYMI on the MLF cut:
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For today, still to come:
Offshore yuan update:
![usdcnh 17 August 2023](https://images.forexlive.com/images/usdcnh%2017%20August%202023_id_5a28434f-0da4-4a41-b541-72821551f893_size900.jpg)