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RMB: The people’s currency, the world’s problem - ANZ

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 13, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Delhi) – Research Team at ANZ, notes that the RMB weakness at the start of the year, alongside the sell-off in Chinese equities has roiled markets.

    Key Quotes

    “The Chinese authorities now appear to be trying to contain currency weakness, in what looks like a replay of the post August 2015 devaluation episode.

    As a result, we expect the fixings to be held steady in the near-term. Hence, we recommend a short term tactical trade of selling 1m USD/CNY NDF at 6.6100.

    But given growth and deflation risk in China, further RMB weakness still lies ahead. The challenge for the authorities is managing market expectations around the depreciation path, and the impact on capital flows.”
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