The PBOC USD/CNY fixing is coming up soon – looks like the Bank is lightening up

I posted earlier in the week a useful piece from analysts at HSBC tipping the People’s Bank of China would allow the USD/CNY reference rate to rise:

• HSBC expect the USD/CNY reference rate to drift higher (yuan weaker)

This indeed looks to have been the case so far, with the PBOC easing back on the heavy damping its been applying to the USD/CNY (propping up the CNY).

The modelled estimate (we’ll get this soon) looks to be around 7.25, while there are some expectations doing the rounds that the actual rate could be set on the 7.12 big figure after rising to 7.11 only recently.

USD/CNY weekly candles, the PBOC has held the line against yuan falling too hard:

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