Renminbi Trend | CNY closes up 110 points

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The yuan is strengthening. The onshore yuan to US dollar rate (CNY) closed up 110 pips, rising to a high of 6.7798 in the middle of the session.

The onshore USD/CNY closed at 6.7837, compared with last Friday’s 4:30 p.m. close of 6.7947, up 110 pips, or 0.16%. It also strengthened by 141 pips versus the last trade at 6.7978 at 11:30 p.m.

The offshore price (CNH) also rose through 6.78, reaching a high of 6.7795. As of 4:45 p.m. Hong Kong time, the offshore price was 6.7842, while the onshore price was 6.7817.

The official midpoint set for today was 6.8318, up 55 pips from last Friday, setting a more than 3-year high.

Traders said the U.S.-Iran deal being “basically agreed” clearly boosted risk appetite, with the US dollar index slipping below the 99 level, and the yuan also gaining slightly in tandem. Overall, the yuan remains more likely to rise than fall.

Ping An Bank’s report believes that, against the backdrop of the People’s Bank of China gradually strengthening its midpoint, the yuan is showing extremely strong resilience and steady appreciation momentum. Key to watch will be changes in the PBOC midpoint guidance and corporate FX settlement willingness. It also needs to remain alert to the dividend repurchase season or hedging actions that could boost near-term yuan appreciation momentum, as the yuan may fluctuate in the 6.77 to 6.82 range.

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