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

  • 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.

The previous close was 7.2308

Massive 1400+ pip difference between the estimate and the rate set by the Bank. The PBoC is working overtime to prop up the yuan! This is the largest gap since October of 2023.

PBOC injects 2bn via 7-day RR, sets rate at an unchanged 1.8%

  • 150bn yuan of RRs mature today
  • thus net 148n yuan drain on the day in OMOs