CNH: USD/CNY Fixing Makes Fresh Low For 2025, Fixing Error Unchanged

• CHINA SETS YUAN CENTRAL PARITY AT 7.1498 TUES VS 7.1491

The BBDXY range overnight was 1199.27 - 1203.10, Asia is currently trading around 1202. The BBDXY managed to extend through the 1200 area. On the way down the BBDXY has been heavily sold every time it has challenged the 30 EMA on the Daily(See Chart Below), will the sellers again use this area to reload shorts or can the USD finally initiate some sort of a correction. The larger picture though still remains one of USD weakness and a sustained break above 1220 would be needed to begin challenging the shorts conviction. 

• Robin Brooks on X: “The Dollar has been rising continuously in July. That doesn't get talked about much, because at this point there's basically only Dollar bears out there. It's also notable that the Dollar is up slightly today, even with all the tariff headlines. Should give Dollar bears pause...”
• The Kobeissi Letter on X: “The US Dollar remains the most dominant global currency: The US Dollar's share of global payments is now at 48%, the highest in 13 years, according to SWIFT data. This percentage is TWICE as large as the Euro and 16 times higher than the Chinese Yuan. The US Dollar is also involved in 88% of all foreign exchange (FX) transactions globally, making it the most liquid and accessible currency in the world. The Dollar's supremacy remains unchallenged.”
• There is a broad consensus that the USD is set to embark on a decent move lower as the world reduces its exposure to the US and repatriates a lot of these flows. This consensus will also result in some decent short squeezes as a lot of the market is positioned the same way.
• Data/Events : Empire Manufacturing, CPI

Fig 1: BBDXY Daily Chart

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

The AOFM sells A$300mn of the 4.75% 21 June 2054 Treasury Bond, #TB169:

• Average Yield (%): 5.0527 (prev. 4.9497)
• High Yield (%): 5.0475 (prev. 4.9550)
• Bid/Cover: 3.2133x (prev. 2.8433x)
• Allotted at Highest Accepted Yld as % of Bid at that Yld (%): 90.2 (prev. 52.9)
• Bidders: 54 (prev. 50), 22 successful (prev. 22), 13 allocated in full (prev. 16)