The Chinese Yuan would not be moving this aggressively without the endorsement of the central bank. In fact, the rapid turnaround in the currency pair suggests that the People's Bank of China is shifting away from a policy of Yuan appreciation. Their motivation is simple - to provide support for the export sector and in turn the overall economy as it slows gradually. The PBoC pledged greater Yuan flexibility this year but with the currency moving lower, their actions don't seem to match their intentions.
The reason why the recent depreciation in the Chinese Yuan is important for forex traders is because of the potential spillover to G10 currencies. We haven't seen the sell-off in Shanghai stocks hit other stock markets in the region but if they continue to slide, it may be difficult for global investors to ignore the move. If it lasts, the recent rally in USD/CNY is also negative for Asian currencies including the Japanese Yen, Australian Dollar, Korean Won and Malaysian Ringgit.
With no major U.S. economic reports scheduled for release today, it should be a relatively quiet North American trading session. Most of the major currencies will take their cue from U.S. equities, which are poised for a higher open. Based on the early moves in the FX market, there's definitely an appetite for risk today but there is no clear catalyst.
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