Potential for a lower USD/yuan is gaining
Overnight note from Citi on CNH - the analysts noting the tame setting of the onshore yuan from the PBOC (I posted similar on on Thursday)
Citi see potential for USD/CHN to fall near term. Says that while the USD/CNY fix has been moving higher, but:
- what has stood out to us is the direction of the fixing error -- otherwise known as the countercyclical factor
- USD/CNY fix "has been set lower than expected for six out of the past seven days"
- suggest the potential for a squeeze lower in the pair
Citi also note that a " squeeze in .... EUR/USD higher could be building. If so, the tactical path of the USD is certainly to the downside"
EUR/USD surged Thursday Europe/US time, adding to its better week: