Yesterday onshore USDCNY crossed 6.2650 intraday; 1.74% above fixing
Until recently USDCNY spot has stayed slightly above 1% from official fixing, making limited use of the additional available headroom from the 17 March band widening (Figure 1). CNY and CNH have remained nervous, particularly on days where the PBOC fixes USDCNY higher than previous session. Yesterday, official fixing moved 24 pips higher to 6.1580, interrupting 5 straight sessions of lower fixing and prompting a USD rally in both onshore and offshore markets. Onshore USDCNY spot rallied to 1.74% above fixing, (a record high distance) before easing to 1.65%. As spot approaches the upper band, price risk from flows diminish, but risk of higher USDCNY fixing remains.
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