Yuan's depreciation is more caused by global situation, National Bureau of Statistics spokesman Sheng Laiyun says at a briefing after release of 3Q economic data. Yuan depreciation has brought pressure in short term but Yuan doesn't have the fundamentals to depreciate in medium, long term. Yuan internationalization will improve the demand-supply relation of yuan.
USDCNH fell to a low of 6.7380 before the GDP release but poorer than expected IP data saw prices spike up to a high of 6.7472 soon after the release. However, traders were mindful of the presence of PBoC offers near 6.7500 and the pair soon retreated back below 6.7450. Despite obvious buying interest, the CNH/CNH is now within only 50 pips. With the PboC not willing to let 6.7500 go without a fight, we do not expect the spread to widen anytime soon. C.L