Two days of sharply lower fixings raise questions on further RMB weakness
Following Friday’s sharply lower official USDCNY mid-rate fixing (85 pips lower, the largest drop since January) People’s Bank of China (PBOC) again surprised the market this morning with another strong fixing, down 138 pips to 6.1485. Today’s drop in USDCNY mid-rate is the largest since October 2012; and two big figures lower when combined with Friday’s fix. The market is speculating whether the central bank is signaling an end to RMB depreciation, or even a resumption in RMB appreciation.
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