China state banks sell Dollars onshore and offshore to defend Yuan
Early Tuesday morning in Asia, Reuters quote three people with direct knowledge of the matter while stating that China’s major state-owned banks were seen selling US Dollars to buy Yuan in both onshore and offshore spot markets in early Asian trade.
The news also mentioned Chinese leaders’ readiness for further stimulus and the People’s Bank of China’s (PBoC) active defense of the onshore Yuan (CNY), via daily fix, to justify the latest slump in the USD/CNH price.
Market reaction
The news add strength to the market’s risk-on mood and helps the risk-barometer AUD/USD to refresh intraday high near 0.6765 while dragging the USD/CNH towards the two-week low, down 0.45% on a day near 7.1500 by the press time.
Also read: USD/CNH slides to 7.1500 as PBoC defends Yuan, China stimulus loom