ICYMI – further intervention from China to support the yuan overnight

USD/CNH is off its Thursday highs with Chinese State banks intervening to sell USD/CNY.

I gave a heads up to the intervention yesterday:

• Further Chinese intervention to prop up the yuan: State banks USD/CNY sellers

And Justin followed up with more later in the session:

• China reportedly told state banks to escalate yuan intervention this week

There was further selling by State banks during London time, but the impact has been small only:

Yesterday the People’s Bank of China signalled very clearly it’d like the yuan to stop plunging so rapidly, with a reference rate more than 10 big figures away from the modelled estimate:

• its most aggressive setting divergence in this episode of yuan weakness so far and a sign the Bank wants to slow the descent of the currency
• PBOC sets USD/ CNY central rate at 7.2076 (vs. estimate at 7.3047)

This article was written by Eamonn Sheridan at www.forexlive.com. Source