So another much lower fix at 6.3549 .. but spot USD/CNY onshore immediately trades higher to top end of the band, at 6.3867 – and sits there all mng
The lower fixes, higher spot been going on all week but today most extreme case: some of it still related to arb players: those who can will buy USDCNY onshore and sell USD/CNH offshore; some of it may be related to next week US congressional votes on CNY; might be related to fact that China is on holiday all week next week; and maybe as well its PBoC trying to keep some stabilization to a mkt that otherwise would be scrambling for USD in face of liquidity tightening and USD strength elsewhere ..
USD/CNY ndf’s higher, and the curve STEEPENING massively .. USD/CNH again trades much high as well as lack of offers in USD/CNY forces people to buy USD/CNH
Fix 6.3549
Spot CNY 6.3867
Spot CNH 6.5250
CNY NDF’s % appreciation Annualized
1m 6.4100 6.4150 -0.36% -4.38%
2m 6.4130 6.4180 -0.41% -2.47%
3m 6.4140 6.4190 -0.43% -1.71%
6m 6.4250 6.4350 -0.60% -1.20%
1y 6.4350 6.4450 -0.76% -0.76%
2y 6.4250 6.4550 -0.60% -0.30%
CNH outrights
1m 6.4740 6.4745 0.80% 9.58%
2m 6.4730 6.4740 0.81% 4.89%
3m 6.4715 6.4725 0.84% 3.35%
6m 6.4625 6.4645 0.98% 1.96%
1y 6.4470 6.4500 1.22% 1.22%
HSBC Global Research