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What I am going to say here about the USD/CNH might surprise you

I speak to some pretty well-connected people now and again and what I have been told about the state of the Chinese property market is nothing new. What is new is the extent to which the PBOC is moving to try and fix what is a mounting commercial bank systemic debt problem that simply will not go away. Now it seems the commercial banks are trying to push that mountain of unsustainable debt further forward into the future. From what I have been told there is rising panic in the corridors of power in Beijing. This looks like an accident that is finally about to happen. At the same time, Mr Market seems to be taking this as a positive and pushing the Chinese currency higher. Well, there are serious misgivings about that from this angle, but whatever happens, the offshore USD/CNH is as important to keep an eye on right now as it ever was and anything else for that matter too, particularly as it affects the Yen and de facto the dollar elsewhere. The USD/CNH is just now trading at 7.1365

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