A stronger PBOC fixing earlier today has been a catalyst for a push higher in the Chinese yuan, which in turn has helped out the antipodean currencies today as noted here. The onshore yuan is now at its highest against the dollar since early August and that’s a sign of waning appetite in the greenback in general as one of its key tailwinds this year is now removed.
USD/CNY daily chart
That’s a worrying signal for the greenback as investors are starting to come around to the idea of a recovery in the yuan, or in the Chinese economy. Or perhaps it is a signal of improving risk appetite in general. But whatever the case is, it’s not good news for the dollar. That’s for sure.
Given the considerations we’re seeing, there is reason to expect the dollar’s recent retreat to extend a bit more in trading this week it would seem.