ForexLive Asia-Pacific FX news wrap: Yuan intervention

June 11, 2024 at 04:49AM

Yuan intervention – China’s major state-owned banks seen selling USD/CNY

European Commission expected to announce Chinese electric vehicle (EV) tariffs this week

Onshore yuan (CNY) has dropped to its weakest since mid-November 2023

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Australian May business confidence -3 (prior 1.0)

North Korea soldiers crossed the border into South Korea on June 9

PBOC sets USD/ CNY reference rate for today at 7.1135 (vs. estimate at 7.2724)

Bank of America says long oil is the best upside hedge into the US election

Japan finance minister Suzuki crossing the news wires, doesn’t mention the yen

HUBFX

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Trade ideas thread – Tuesday, 11 June, insightful charts, technical analysis, ideas

The
People’s Bank of China set the onshore yuan reference rate at its
weakest since January 19 today, which allowed USD/CNY to trade
higher, to around 7.2551 and levels not seen since the middle of
November last year. The weakness in the onshore yuan prompted major
Chinese State Banks to sell USD/CNY to support the yuan. These banks
often act on behalf of the People’s Bank of China to intervene in
the market when instructed to do so.

Elsewhere
major FX was relatively subdued. AUD/USD drifted back from highs
above 0.6610 to around 0.6590. News dropped earlier in the session of
an AUD1.2bn takeover offer made by Bain for an Australian retailer of
automotive parts and accessories (Bapcor). You’d think that’d be
bullish for the AUD but by the time news of such developments hits
the headlines you can bet your farm that Bain (in this case) had well
and truly bought enough AUD for whatever hedge it needed for their
bid. Data
from Australia today showed a slip for business conditions and
confidence in May. The inflation details in the report showed it
edging a little higher, which is not a comfort for the RBA.

USD/JPY
ticked higher, tracking back to just over 157.30. There
were no obvious fresh catalysts.

This is the offshore yuan (USD/CNH), responding to the yuan intervention (conducted in USD/CNY):

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

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