The People's Bank of China's decision to fix the renminbi 0.22 per cent higher on Monday could seem minor - until you see a chart of it.
The central bank determines the mid-rate for the renminbi each morning. After weekend data showed the trade surplus nearly double from a month earlier to $35.8bn, the PBoC lifted the daily fix in its biggest move in a year-and-a-half.
The move could signal that the PBoC is satisfied with its effort to batter the currency in recent months.
Guided by the PBoC, the renminbi has declined 3 per cent in 2014, a move that both helps Chinese exports and curbs one-way speculation that the renminbi will keep appreciating.
Lifting the daily fix by so much suggests the PBoC sees success on both of these fronts.
First, the weekend's trade data showed exports accelerate, but imports unexpectedly declined and indicated consumption is weakening.
Lifting the fix suggests policymakers are happy with the state of exports and are now trying to support the import side of the trade equation, said Sacha Tihanyi, currency strategist at Scotiabank in Hong Kong, who called the move "wholly unexpected."
He also said:
It could be that policy makers are making efforts to bolster the volatility of the fix in an effort to increase uncertainty in the market, making it more consistent with the ultimate reform goal of a relatively freely-trading market.
Second, analysts at Barclays noted that forex purchases from the central bank "slowed markedly in recent months." This suggests reduced capital inflows, including the speculative kind the central bank wants to thwart.
Last week Barclays calculated that China experienced more than $8bn in capital outflows in April, following a six-month period when about $140bn came in the other direction.
To avoid expectations that the currency will weaken further, the PBoC can use the fix and FX intervention "to manage the degree of near-term depreciation [and] avoid expectation of large currency depreciation," the analysts wrote before the fix was set.
Mr Tihanyi suggests keeping a close eye on the fix each day, to interpret just what the PBoC is up to.
We shall see in the coming days whether this intentional fixing behaviour represents an effort to increase fixing volatility (and have the knock-on effect in spot trading), or whether it represents a trend reversal in policy maker fixing intention.
丰业资本(Scotia Capital)驻香港策略师萨沙?泰汉伊(Sacha Tihanyi)表示，提高人民币中间价表明，决策者对于目前的出口状况感到满意，现在会将重点转向提振进口，他称此举“完全出乎意料”。