Yuan Slips Despite Strong PBOC Fixing
The Chinese yuan edged lower on Wednesday even after the PBOC delivered its strongest daily midpoint since May 2023. Softer January inflation data and ongoing factory deflation reinforced expectations of further easing, keeping pressure on the currency.
$ATM USDCNY hovered near 6.915, while 10-year bond futures climbed to their highest since November, signaling falling yield expectations. Analysts see China’s 10-year yield potentially drifting toward 1.6% from 1.79% if loose policy continues.
$OG Interestingly, the central bank set the fixing stronger but still weaker than market estimates — a move traders view as controlled appreciation rather than aggressive tightening.
After hitting a near three-year high ahead of Lunar New Year corporate demand, the yuan now faces a tug-of-war between policy support and easing expectations.
$RIVER
📌 Key watch: Any shift in PBOC stance and post-holiday liquidity flows.
#USDCNY #Yuan #write2earn🌐💹