21 Jan 2016
CNY stability can't last - Westpac
FXStreet (Guatemala) - Analysts at Westpac explained in a respect to “CNY's stability that these prices can’t last”.
Key Quotes:
"The PBoC’s current approach to USD/CNY fixings is essentially the same as pre-Aug 2015, just on a less dramatic scale. The official CFETS close on Wed was 6.5796 but it is sensible to expect USD/CNY fixings to hover around 6.56 until further notice."
"But any given day holds the risk of a relatively sharp move, with a notably higher USD/CNY the most likely outcome. Hence the risks for the likes of AUD, NZD and Asian currencies around the daily CNY fixings are skewed firmly to the down side. We note with interest the comment from former PBoC adviser Li Daokui in Davos: ““It’s meaningless to peg the yuan against the dollar.”"
Key Quotes:
"The PBoC’s current approach to USD/CNY fixings is essentially the same as pre-Aug 2015, just on a less dramatic scale. The official CFETS close on Wed was 6.5796 but it is sensible to expect USD/CNY fixings to hover around 6.56 until further notice."
"But any given day holds the risk of a relatively sharp move, with a notably higher USD/CNY the most likely outcome. Hence the risks for the likes of AUD, NZD and Asian currencies around the daily CNY fixings are skewed firmly to the down side. We note with interest the comment from former PBoC adviser Li Daokui in Davos: ““It’s meaningless to peg the yuan against the dollar.”"