USDCNY has risen to an upper bound of the trading band, and the CNY is facing depreciation pressure. Officials have communicated that they prefer a stable yuan, and the PBoC has kept the fixing stable, but the risk of a weaker yuan has increased. The Chinese yuan is not a free floating currency; instead “China pursues a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies” (CFETS). For the USDCNY the People's Bank of China sets a daily fixing (central parity rate), which serves as the midpoint for the currency pair. The exchange rate can move +/-2% around ... (full story)