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China's central bank set the yuan reference rate 0.9% weaker at 6.6375 per dollar, its biggest fixing move since August. The move came as the dollar index jumped 2.4% in two days, its largest gain since 2011, after Britain voted to leave the EU.
The onshore yuan traded near its weakest close since December 2010.
A weaker yuan makes Chinese exports more competitive and can cut demand for dollar-priced commodities, while a stronger dollar typically pressures grain and feed prices.
bloomberg.comKyoungwha KimJun 27, 2016After 398 past bullish macro events, USDCNY moved a median +0.0% over 5 sessions (56% higher; middle half -0.3% to +0.5%), and +0.0% over 20.
After 2,356 past bullish macro events, DXY moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% 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.
The PBOC set its weakest fixing move since August (0.9%) as the dollar surged after Brexit, directly pushing USD/CNY higher in the window.
