Boy, I’ll tell you what, the yuan has got some serious momentum.
Following the strongest fix in a year (0.34% stronger to 6.6353 per dollar), both the onshore and offshore yuan rallied hard, pushing through 6.63 and beyond.
From where I’m sitting, this looks like the ninth consecutive winning session for the offshore yuan. That’s the longest streak since January 2014.
“The PBOC isn’t ready to allow the pair to go into free-fall and as the 6.60 line approaches the daily yuan parity fixings will probably be tweaked to show investors that it isn’t a one-way bet.,” Bloomberg’s Mark Cranfield wrote overnight, adding that “even so, CNY short-term yields are high enough relative to USD to give the yuan carry trade status at a time when low-volatility returns are hard to find.”
We’re now beyond a one-year high for both the onshore and offshore yuan.
