Back
15 May 2015
CNY band could widen in H2 – Rabobank
FXStreet (Edinburgh) - The CNY trading band could widen in the coming months, suggested Strategist at Rabobank Michael Every.
Key Quotes
“Despite official commitment to exchange rate stability, we remain bearish on CNY as the Chinese economy continues to slow; that is seeing a continued loosening of monetary policy ahead, reducing the positive carry”.
“Fiscal policy is slowly turning more expansionary, while there are now suggestions that China will embark on some form of QE involving PBOC local government debt purchases”.
“Although no radical action is expected before the October decision to potentially include CNY in the IMF’s Special Drawing Rights (SDR), we still expect CNY to drift lower within the +/- 2% trading band, while the band itself may be set wider as we move into H2 2015”.
Key Quotes
“Despite official commitment to exchange rate stability, we remain bearish on CNY as the Chinese economy continues to slow; that is seeing a continued loosening of monetary policy ahead, reducing the positive carry”.
“Fiscal policy is slowly turning more expansionary, while there are now suggestions that China will embark on some form of QE involving PBOC local government debt purchases”.
“Although no radical action is expected before the October decision to potentially include CNY in the IMF’s Special Drawing Rights (SDR), we still expect CNY to drift lower within the +/- 2% trading band, while the band itself may be set wider as we move into H2 2015”.