, 4 tweets, 2 min read Read on Twitter
So China allowed the yuan to break 7 in response to Trump's latest tariff threat. Not really a surprise, as China had no good options left to tariff. Now the question is how far does China want the yuan to move ...

I agree with Mr. Evans-Pritchard of Capital Economics. The PBOC has the tools to set a new range around the CNY. The question to me is where the PBoC wants to set the new weak edge of a band (v USD and CFETS), and how it goes about doing so
The intervention proxies for July won't be out for another ten days or so, but there wasn't any real sign of pressure leading into this move -- it looks like a discretionary response to Trump's new tariffs.
One technical note -- the settlement numbers were surprisingly good in May and then surprised in the opposite way in June (it would have made more sense if the numbers were bad in May and stabilized in June). and PBOC balance sheet has been almost too quiet ...
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