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Forex Flash: PBOC is finally fixing USD/CNY higher - BBH

FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the PBoC is finally fixing USD/CNY higher.

They begin by noting that after a long string of CNY gains, it has finally started to weaken in line with the rest of the region and for 4 out of the 5 past days, USD/CNY has been fixed higher, with the Thursday fix the highest since May 6. They add that next week will give markets the first glimpse of May data from China, with the HSBC flash manufacturing PMI due out next Wednesday.

Further, they see that April data was mixed, with surveys (PMIs) weaker than expected and hard data (trade, new loans) stronger than expected. They finish by writing , “We think that China data probably offers modest downside risks to markets rather than upside risks at this juncture. Between the broad based dollar rally under way and downside risks to the Chinese economy, we think that the yuan is likely to trade sideways to weaker in the coming weeks. Next week, we get the first glimpse of the economy with HSBC flash PMI on Thursday.”

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