The PBOC strengthened the CNY fixing by over 0.3% today – its biggest fixing move since June 2010 as the Yuan strengthens to 6-month highs against the USD. This seeming ‘panic’ move comes on the heels of last night’s record trade surplus – which as Goldman notes – was likely dominated by FX inflows thanks to over-invoicing. It is unclear the reasoning for the move in the CNY fixing but one wonders if, with industrial commodities continuing to plunge (CCFD collateral value dropping) and now PMIs rolling over, if further over-invoicing is being anticipated as cover for a notable slowdown in growth. One thing is clear – after today’s surge in the USD and decoupling with US stocks, something is changing.
This post was published at Zero Hedge on 09/08/2014.
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