Offshore Chinese Yuan hit a new record low against Dollar today, recent depreciation continued. That’s second straight session of decline after President Xi Jinping secured a tradition-breaking third consecutive leadership term on Sunday, unveiled a new cabinet stacked with his loyalists.
In response to the decline in exchange rate, PBOC raises the cross-border macro prudential adjustment ratio for corporates and financial institutions to 1.25 from 1. The central bank said, it will “increase the sources of cross-border funds for enterprises and financial institutions, and guide them to optimize the asset-liability structure.”
Purely technically, near term outlook in USD/CNH will stay bullish as long as 7.2189 support holds. Current up trend should target 161.8% projection of 6.3057 to 3.8372 from 6.7159 at 7.5759. But of course, the government could intervene any time.
