USD/CNY rose to 6.734 levels, its highest since September 2010 after the People’s Bank of China (PBOC) announced the weakest daily fix since 2010.
No respite from inclusion in IMF reserve basket
Contrary to widespread belief, Yuan’s inclusion in IMF’s reserve basket has not helped it strengthen. Moreover, the People’s Bank of China (PBOC) has been weakening the currency via lower daily fix.
The central bank set USD/CNY at 6.7379 vs Friday’s fix of 6.7157. Moreover, the combination of rising December Fed rate hike bets and devaluation of Yuan by PBOC has pushed the pair to a six-year high.
USD/CNY Technical Levels
Major resistance is seen at 6.8158 (Sep 2010 high) followed by a hurdle at 6.89 (Dec 2008 high). On the lower side, 6.7017 (July 2016 high) would open doors for a retreat to 6.6684 (monthly low).