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27 Feb 2014
Flash: PBoC behind the CNY fall? - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, expects the USD/CNY band to widen in the short-term.
Key Quotes
"Elsewhere, the Chinese yuan has continued to weaken modestly overnight with the Chinese authorities also setting the USD/CNY daily fix modestly higher at 6.1224 today. However, the Chinese equity market has increased modestly."
"Investor concerns that the weaker yuan was signalling a weaker outlook for economic growth in China appear to be easing leading to less risk-averse trading conditions in the Asian trading session. A report released yesterday by the Wall Street Journal cited semi-official sources stating that the PBoC engineered the recent decline in the country’s currency as part of its efforts to prepare for a wider daily trading band".
"It fits with our view that the Chinese authorities will soon widen the USD/CNY’s daily trading band to +/- 2.0% around the daily fix, after which we expect the yuan to firm moving towards the bottom of the new band."
Key Quotes
"Elsewhere, the Chinese yuan has continued to weaken modestly overnight with the Chinese authorities also setting the USD/CNY daily fix modestly higher at 6.1224 today. However, the Chinese equity market has increased modestly."
"Investor concerns that the weaker yuan was signalling a weaker outlook for economic growth in China appear to be easing leading to less risk-averse trading conditions in the Asian trading session. A report released yesterday by the Wall Street Journal cited semi-official sources stating that the PBoC engineered the recent decline in the country’s currency as part of its efforts to prepare for a wider daily trading band".
"It fits with our view that the Chinese authorities will soon widen the USD/CNY’s daily trading band to +/- 2.0% around the daily fix, after which we expect the yuan to firm moving towards the bottom of the new band."