USD/CNY slumps to fresh 9-month lows on Fed, firmer Yuan-fix

The Chinese currency rallies hard against its American rival so far this Thursday, and remains on track to book the best day in nearly two months.

Heading into Europe, the USD/CNY pair is seen making minor-recovery attempts from nine-month troughs struck at 6.7227 levels. The heavy losses in the cross can be mainly attributed to the latest declines in the US dollar versus its main competitors, after the FOMC statement turned out to be less hawkish than markets’ expectations.

Also, the spot benefited from a stronger Yuan fix, as the Chinese central bank (PBOC) set the Yuan reference rate at 6.7307/ USD on Thursday, the strongest level since Oct. 18 2016.

The sentiment around the Chinese currency was also boosted by the results of the latest Reuters poll, which showed the bullish bets on the Yuan rose the highest since December 2016.

Meanwhile, a trader at a Chinese bank in Shanghai noted: “The Yuan was basically following the dollar's movements in morning trade."

At the time of writing, USD/CNY recovers to 6.7323, still down -0.32% on the day.