“Between A Rock And A Hard Place” – China’s Latest Yuan Gambit

So last week, we suggested that people might be thinking far too hard about stronger yuan fixings and the PBoC's move to introduce what China is euphemistically calling a "counter cyclical adjustment factor" to the fixing mechanism. The spot had begun to deviate materially and habitually from the fixings and analysts' models were routinely predicting weaker fixes than what ultimately emanated from the PBoC. Plus, policy banks were selling dollars in the onshore market. Clearly, Beijing was gett