Was it a big yuan fall or just a fat finger? What happened to China’s yuan last night
Forex dealer typo mistakenly depicting 8 per cent plunge in the yuan’s value in the offshore market, corrected after hours of confusion
The foreign exchange market jittered last night on a possible typo in an offshore yuan price quote, which indicated an about 8 per cent depreciation of the yuan against the US dollar. The errors were corrected after hours of confusion.
What happened to the yuan last night?
Google quoted offshore yuan/dollar parity at 7.47 to 7,48, citing data from XE.com, a foreign exchange trading information provider. The quote indicated a precipitous fall of the yuan from a close of 6.8830 in the onshore market. Price quotes on Reuters and Bloomberg terminals, the common tools for professional traders, were correct, but retail consumers and small investors relying on price quotes provided by Google were puzzled.
The misquoted prices were posted for a few hours before they were corrected. The daily parity price in the onshore market was set at 6.8575 on Tuesday.
Under China’s trading band, the yuan can only move no more than 2 per cent daily up or down against the dollar in the onshore market. While offshore yuan trading is not subject to the trading band, it usually stays close to onshore price.
How did it happen?
ICAP, a London-based foreign exchange brokerage and data provider, was the source of the quotes, according to a screen shot circulating on social media.
“Today in the early Asian hours there was an inaccuracy in spot USD/CNY quotes published to the market via a number of data sources, including vendor screens that ICAP publishes to,” ICAP said in a statement on Tuesday.