People's Bank of China set the reference rate for the yuan on land above 7 today, but not as high as expected.
When I say not as high as expected, it is for USD / CNY, which means that the yuan was not set as weak as expected. All this week, we have been focusing on the reference speed setting as PBOC lets the yuan slip after backing it up in previous mills.
When the yuan was allowed to slide, it adversely affected perceptions of risk, thus weakening bond yields, equities and other risk transactions (eg AUD).
Today's not so weak as expected has led to a "risk" encounter on a "well that could have been much worse".
- Eyes left on the PBOC reference rate for the yuan on land today
- The PBOC sets the USD / CNY reference rate for today to 7.0039 (vs. yesterday at 6.9996)
- PBOC yuan in the middle of interest rate was not as low as expected for CNY
- CAD made a break for it, higher oil, not so low yuan gave it a boost
Offshore yuan expected a much weaker CNY rate, it has reversed since the setting: