The People’s Bank of China fixed the onshore yuan stronger than expected at the reference rate setting today. The expected rate was just shy of 7.22 but the Bank set USD/CNY under 7.21. This was the second day in a row the PBOC had set the CNY stronger than expected. The yuan has been losing value rapidly and while the Bank is not unhappy with the decline it is not comfortable with too rapid a pace.

With a stronger than expected CNY the offshore yuan jumped higher. Other major FX also gained. EUR, CAD, GBP, AUD, CHF, NZD all higher. AUD/USD has been a particular beneficiary, its over 0.6700 as I update.

USD/JPY, of course, is in its own world, its not a lot change on the session circa 143.40.

Chinese Premier Li Qiang gave a speech, he said nothing on economic stimulus. He said China is on course to achieve its around 5% economic growth target in 2023.

Asian equity markets:

  • Japan’s Nikkei 225 -0.8%

  • China’s Shanghai Composite +0.6%

  • Hong Kong’s Hang Seng +1.2%

  • South Korea’s KOSPI -0.3%

  • Australia’s S&P/ASX 200 +0.6%

usdcnh offshore yuan 27 June 2023

Offshore yuan strength.