USD/CNH: Sell-off ahead of PBOC, stable fix again?

FXStreet (Bali) - USD/CNH has seen strong selling ahead of the daily PBOC USD/CNY fix, falling from 6.6150 down towards 6.6090, in what could be a move by dealers anticipating another stable fixing in USD/CNY, if not a slight appreciation of the onshore Yuan.

As a reminder, the new offshore Yuan RRR rules on yuan deposits of offshore branches of mainland banks, came into effect Jan 25th. The measures make the borrowing of offshore Yuan more expensive, as the PBOC aims to keep the USD/CNY vs USD/CNH gap tight again and avoid a repetition of the massive widening in the gap earlier this month, which led to China state-controlled banks intervening in USD/CNH while it was trading above 6.70.