The offshore yuan is weak heading into the PBOC fixing today – but it's a long way to 7.33

<p>We get the People's Bank of China reference rate just after 0115 GMT, which is 9.15pm US Eastern time. </p><ul><li><a href="https://www.forexlive.com/centralbank/pboc-is-expected-to-set-the-usdcny-reference-rate-at-72540-reuters-estimate-20230629/" target="_blank" rel="follow" data-article-link="true">PBOC is expected to set the USD/CNY reference rate at 7.2540 – Reuters estimate</a></li></ul><p>The 'expected' is not overly weak. The People's Bank of China have pushed back against the pace of the yuan decline, but not as strongly as they might have. Yuan is trading near seven-month lows. The People's Bank of China have not been too concerned, seeing a lower yuan as a supportive proper for exporters amidst an economy that is not performing as well as it was expected to bouncing out of COVID. </p><p>State-owned banks sold USD against the yuan earlier this week but were not reported to have done so yesterday, a sign the PBOC is not being aggressive in its defence of the yuan. </p><p>RBC Capital Markets comments:</p><ul><li>PBOC recent actions are more about blunting the pace of yuan depreciation rather than trying to draw some line in the sand</li><li>We are likely to get further fixing guidance if dollar-yuan starts to rise quickly again through 7.25, or it approaches certain key psychological levels, such as last year’s high near 7.33</li></ul>

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