Yuan keeps to five-and-half year minimum
On Wednesday, the Yuan didn’t change a lot, staying close to its 5-1/2-year minimum against the evergreen buck, after heavy greenback buying by banks’ clients compensated the major bank’s stronger midpoint setting.
The People’s Bank of China also dubbed PBOC stood on the sidelines in the morning, thus letting the market greenback demand keep the Yuan soft.
In fact, greenback buying in the market appeared to be much stronger than for the last few days. This simply means that customers were panicky, as the Brexit aftermath is still affecting the financial markets.
Meanwhile, market participants didn’t report any signs of PBOC intervention. Perhaps, the country’s number one financial institution is simply letting market forces play a more decisive role in determining the national currency’s value.
Considering the fact that market expectations are currently tilting towards Yuan depreciation, the major bank is quietly allowing the Yuan to drop further as long as intraday swings don’t get out of hand.