With all western eyes firmly focused on US payrolls tomorrow, China is preparing for the biggest leadership gathering of the year this weekend. Offshore Yuan (USDCNH) is soaring (up over 5 handles in the last 24 hours) ahead of The National People’s Congress as PBOC Deputy Governor hinted at support for the currency saying that it isn’t “strictly” pegged to the new basket.
This is the biggest surge in Yuan in a month…
Chart: Bloomberg
Pushing Yuan back to 3-week highs…
Chart: Bloomberg
This is the richest Offshore Yuan has been to Onshore Yuan since 29th Sept…
Chart: Bloomberg
“The currency move is likely a psychological reaction to the National People’s Congress because the market is expecting to hear more comments from top officials stressing the importance of financial stability, curbing outflows and encouraging inflows,” said Tommy Ong, managing director for treasury and markets at DBS Hong Kong Ltd. “It’s unlikely to be any intervention.”
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