This is a HUGE move from the People’s Bank of China, setting the yuan MUCH stronger than was expected.
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 7.2388
PBOC injects 6bn yuan in open market operations (OMOs) via 7-day reverse repos (RRs) at an unchanged rate of 1.9%
- 3bn yuan of RRs mature today
- thus a net 3bn yuan injection on the day in OMOs
This article was written by Eamonn Sheridan at www.forexlive.com. Source