All eyes on the PBoC yuan reference rate today – will it be above 7.20?

Bloomberg (gated) ask the question:

• The yuan weakening past a level that China had been defending throughout December has returned the spotlight to its daily reference rate for the managed currency to gauge Beijing’s appetite to support it.
• Currency traders are waiting to see if the People’s Bank of China will set the so-called fixing at a level weaker than 7.2 per dollar, a closely watched line, around which the yuan is allowed trade in a 2% range.
• The PBOC maintained support on Friday, but the onshore yuan breached the psychological milestone of 7.3 per dollar for the first time since late 2023, amid concerns over China’s economic struggles and a widening bond yield discount to the US.

The setting is along around 01.15 GMT.

USD/CNY update, and why the questions …

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