USDCNY: Still guarding 6.7000 - MUFG

Research Team at MUFG, notes that the USD strengthened broadly against G10 and most EM Asian currencies amidst the Turkish political turmoil and a deluge of US data beat, but USD/RMB (both CNY and CNH) ended up lower than a week ago given the firm offering interest at the 6.7 level.

Key Quotes

“The USD/CNY fixing at 6.6971 on 19 July was the highest since 2010, but this was actually already lower than our fixing model forecast, corroborating PBOC's intention to keep USD/RMB below 6.7 heading into this weekend's G-20 meeting in Chengdu. In June, capital outflow quickened again (cf. yesterday's call note) and the redback's share of global payments fell to lowest since October 2014 at 1.72%, so China should continue to suppress market's bearishness on the RMB via defending the 6.7 handle. June industrial profits out 27 July may impress given the rosier VAI/PPI release earlier.”