ForexLive Asia-Pacific FX news wrap: PBOC set yuan stronger than expected

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The
most important time of the session was once again the People’s Bank
of China’s yuan reference rate setting. Expectations for the
mid-rate were around 7.2540. The PBOC shrugged those off with a much
stronger CNY, setting USD/CNY at 7.2208. This sent a panicked shock
wave of selling through USD/CNH which fell right of the bed, to back under
1.2350. The thing to bear in mind though is that while the People’s
Bank of China doesn’t want the yuan fall to be rapid they are not
upset by it losing ground. I said as much here, and added, after the strong (for the yuan) mid-rate, that all the Bank was
doing was setting up a nice USD/CNH buy-the dip:</p><ul><li><a href="https://www.forexlive.com/centralbank/pboc-sets-usd-cny-reference-rate-for-today-at-72208-vs-estimate-at-72540-20230629/" target="_blank" rel="follow">Offering up a buy the dip scenario for USD/CNH.</a></li></ul><p>And
here we are, USD/CNH back up again:</p><p>On
the data front today we had Australian
retail sales for
May. These
climbed much
more
than expected, pointing
to a still-resilient consumer. AUD/USD had ticked up a few points
prior to the data release and added only a few more after. Its since
retraced to be not a lot changed on the session. AUD/USD though,
traded pretty much in the same pattern as most FX against the USD.
AUD remains on a strong attached to the yuan: weaker yuan, weaker AUD
&amp; vice versa.
</p><p>USD/JPY
traded in a small range circa 144.35. We haven’t had comments out
of Japanese authorities today.
</p>

This article was written by Eamonn Sheridan at www.forexlive.com.