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Analysts reported that the PBoC had engineered a yuan surge after the onshore spot closed below the fix for 17 consecutive days. Offshore yuan was trading at a discount to onshore, and overnight funding points had turned negative.
Intervention-driven squeezes in yuan funding markets raise the cost of dollars for Chinese importers, which can weigh on purchases of dollar-priced feed ingredients. The impact on prices is limited and uncertain.
heisenbergreport.comJun 27, 2017After 31 past bullish policy events, Chinese Yuan (CNY per USD) moved a median -0.2% over 5 sessions (42% higher; middle half -0.4% to +0.3%), and -0.1% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Describes a PBoC-engineered yuan surge on 2017-06-27 after 17 days of spot closing below the fix, with offshore discount and negative funding points, a plausible mechanism for the abrupt, outsized move.
