USD/CNH: Bull rally hits 6.62, weighs on Aussie

By FXStreet FXStreet (Bali) – USD/CNH just keeps on going higher and higher today, in a continuation of the same theme seen during Thursday, with the spot exchanging hands near 6.62, which equates a rise of over 200 pips since the NY close.

CNH proxy for AUD performance

The depreciation in the ofsshore Yuan (CNH) is causing both the AUD/USD and USD/JPY to be slightly pressured near session lows – CNH has become a proxy for the AUD as long as attention in Yuan exchange rate continues -, although no follow through has been seen as bids continue to absorb offers at current levels. AUD/USD trades at 0.6960 last, while USD/JPY is offered just below 118.00 line.

CNH-CNY gap widening again

The present weakness in the CNH has led the CNH-CNY gap to widen once again, following some dramatic moves in USD/CNH off 6.75 records highs, after PBOC gave orders to state-owned entities in HK to intervene in the CNH and squeeze as much weak-handed CNH shorts as possible. That resulted in a major spike of the Overnight Yuan HIBOR.
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Source:: FX Street