Analysts at Bank of Tokyo mitsubishi explained that forward implied interest rate differentials show markets looking for less RMB depreciation vs. USD (but still in line with our forecasts). Key Quotes: "The official changeover of Fed strategy to two hikes this year may remain a theme for next week, having been taken as dovish by many. EM Asia FX also appears to be stabilizing." "We have long discussed this possibility. Because we think a dovish 2016 Fed may have long ago been priced, we'd expect sustainability of EM stability to largely depend on local factors more than the Fed. But there is a fair gap YTD for EM to catch up with majors against USD." "Our traders expect ample CNH funding offers to continue to month-end as banks seek to avoid the RRR charge. All these may push USD/RMB down. Despite RMB strengthening vs. USD we still look for the basket to weaken. FDI data continued to show -ve growth in USD terms." For more information, read our latest forex news.