US equity futures popped higher along with the offshore yuan after PBOC issued a brief statement claiming that it is not a currency manipulator and tells foreign firms that yuan won't keep falling.
As Reuters reports, China firmly opposes a U.S. decision to label it a currency manipulator, its central bank said on Tuesday, adding that Beijing has not used and will not use the yuan to cope with trade frictions with the world’s biggest economy. Designating China as a currency manipulator seriously harms international rules, the People’s Bank of China (PBOC) said in a statement.
Stocks, already rebounding overnight, gained a little more...
However, this is farcical because of course Chinese authorities do not want to make the yuan a one-way bet and entirely lose control. As we tweeted last night, there are far more serious things PBOC could do if it was serious about stalling the Yuan's freefall...
If Yuan pressure was external, and if China really wanted it to trade inside 7.00 it would just hike overnight repo to 1000% and all the shorts would die— zerohedge (@zerohedge) August 6, 2019
But it isn't, as Bloomberg notes, assurances from China’s central bank that it won’t use the yuan to fight a trade war with the U.S. have fallen on deaf ears.
April 2015: Premier Li Says China Doesn’t Want Devaluation
May 2015: PBOC’s Yi Says Devaluation Not Necessary
August 2015: Yuan Devaluation Jolts Global Markets
April 2019: Xi Says China Won’t Pursue Harmful Yuan Devaluation
May 2019: PBOC Pledges Steady Yuan
Aug. 5, 2019: China Lets Yuan Tumble Past 7 Per Dollar as Trade War Escalates
Aug. 5, 2019: PBOC’s Yi says China Won’t Use FX as Tool in Trade Dispute
Remember, it's different this time.