Reuters are reporting that volatility was very high in USD/CNY earlier this morning after the US Senate passed the currency bill. There was obviously some nervousness that China may retaliate but when some of the bigger players started selling USD towards the upper limit of the 0.5% band, the panic subsided. The mid-point was set at 6.3598, close to yesterday’s level, and there have been no rumblings of retaliation. Perhaps calmer heads will prevail and the expectation that the bill is likely to be voted down in the US House of Representatives or at the very latest in the White House, may well be enough to keep China from taking retaliatory action.