CNH: USD/CNY Fixing Error Widest Since End April As USD Rebounds

The USD/CNY fix printed at 7.1534, versus a Bloomberg market consensus of 7.1532. 

• The outcome continues the downtrend in the fixing outcome, which has largely been in play since early May of this year. The fixing error was close to flat though, ending a run of negative fixing error outcomes seen in the prior two sessions.
• We are likely to see USD/CNH continue to track lower, we were last near 7.1510/15, so fresh lows back to Nov last year. It's overall beta though with respect to USD weakness is likely to remain moderate. Yen is up around 0.35% so far today, while CNH has gained close to 0.1%. 

• CHINA SETS YUAN CENTRAL PARITY AT 7.1534 TUE VS 7.1586

So much for the huge Month-end and Quarter-end selling in US Stocks as the dip finds demand once more and new highs are seen. CFTC data out for last week shows both Asset Managers and Leveraged Funds added to their AUD short positions, given how poorly the USD is trading one would expect most of these shorts are being expressed in the crosses where the has AUD traded poorly particularly against the EUR and GBP. Should AUD/USD begin to build momentum higher through 0.6600 even these crosses will start to be challenged.

• EUR/AUD - Overnight range 1.7894 - 1.7964, Asia is currently trading around 1.7930. The pair again found some supply back towards the 1.8000 area overnight, it has had a good run higher but how the AUD/USD trades through 0.6550/0.6600 will be key. First support seen back towards the 1.7800 area, a break above 1.8000 and the move could extend higher.
• GBP/AUD - Overnight range 2.0848 - 2.0991, Asia is trading around 2.0895. This pair continues to meet supply towards the multiple tops above 2.1000. A sustained break above 2.1050 is needed to see the move higher regain momentum, like EUR/AUD though a more positive risk backdrop and the AUD/USD potentially breaking higher could potentially see this pair back off and move towards the lower end of its 2.0500 -2.1050 range.
• AUD/JPY - Overnight range 94.00 - 94.89, Asia is trading around 94.40. Choppy price action as the pair establishes a range between 92.00 - 96.00. Should risk build on this move, focus could turn back to the 96.00 area.
• AUD/NZD -  Overnight range 1.0762 - 1.0798, the cross is dealing in Asia around 1.0790. The cross is struggling to get any momentum for now. It looks to be in a 1.0750 - 1.0850 range for now as it awaits a catalyst to provide some direction.

Fig 1: GBP/AUD spot Hourly Chart

Source: MNI - Market News/Bloomberg Finance L.P