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Yuan weakness will continue - Deutsche Bank

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 (Guatemala) - Analysts at Deutsche Bank explained that they believe yuan weakness will continue over 2016.

    Key Quotes:

    "Further unwinds of carry trades, FX liability hedging due to poor fundamentals and higher credit risk, and higher tolerance for currency depreciation by Chinese authorities should all help."

    "More broadly, Asia stands out among EM FX as the region which has the most to adjust from post financial crisis imbalances. Output gaps, domestic indebtedness and demographics are all likely to be exposed to widening rate differentials versus the US in 2016. We expect persistent currency weakness in CNH, KRW, THB and TWD."
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