CNH: Short squeeze continues as depo rates spike

FXStreet (Bali) – USD/CNH (offshore yuan) is trading sharply lower for a second consecutive day, following Monday’s epic squeeze of all those holding CNH shorts.

PBOC fix contains topside

The current rate stands at 6.5785, near session lows, and lowest since January 4th, following another stable fix by the PBOC, which set USD/CNY mid-point today at 6.5628 vs prior close of 6.5695 and prior fix of 6.5626.

Offshore yuan depo rates soar

One of the drivers squeezing CNH shorts, as Reuters reports, is that offshore yuan deposit rates soar, which has led to a major narrowing of the CNY-CNH gap . Reuters reports that the offshore yuan (CNH) implied overnight deposit rate has hit a record high at 82%.

USD/CNH (offshore yuan) is trading sharply lower for a second consecutive day, following Monday’s epic squeeze of all those holding CNH shorts.

(Market News Provided by FXstreet)