China’s state banks sold USD for yuan, trying to prop up CNY

China’s currency has been on a fresh downward spiral since the beginning of the new year.

Earlier this week state banks were in the market selling USD/CNY ahead of 7.20 trying to support the currency. On Tuesday the offshore yuan (CNH) hit a 2 month low.

The People’s Bank of China have been holding the reference rate much lower than modelled estimates, also trying to support the yuan.

The model estimate for today’s reference rate:

Around 0115 GMT (2015 US Eastern time) we get the reference rate for the day, which will once again be much lower than that modelled rate.

Onshore yuan update:

This article was written by Eamonn Sheridan at Source