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Sean Callow, analyst at Westpac, points out that after all the headlines on US-China trade and Hong Kong, CNY and CNH are almost dead flat over the week.

Key Quotes

“7.20 to the dollar seems to be the new strong resistance, with USD/CNH falling about 40-50 pips short on Monday and Tuesday (<0.01%)  and USD/CNY rolling over ahead of 7.19."

“Of course the Asian currency rally mid-week on the HK government’s formal withdrawal of the extradition bill and confirmation of the resumption of US-China trade talks helped USD/China pull back. But even before then and despite US tariffs proceeding on Sunday on previously exempt imported Chinese goods, the daily USD/CNY fixings were firmly on the low side, much further below the spot close than we have seen for most of this year.”

“So the yuan is not being weaponized – in fact the opposite seems to be occurring. Whether this costs the PBoC much in FX reserves remains to be seen – the guidance may largely suffice to limit capital outflows.”