HALISTER1: New Game Seen in China Daily Currency Fixing, Rabobank Says

New Game Seen in China Daily Currency Fixing, Rabobank Says

(Bloomberg) -- Asian currencies mostly firmer after comments yesterday by Fed’s Yellen, but CNY is on back foot as PBOC sets fixing weaker than expected, Michael Every, head of financial markets research at Rabobank says in interview.
  • “New game” seems to be;
    • Strong USD, weak CNY, fixing is pegged to basket
    • Weak USD, weak CNY, fixing is pegged to dollar
  • Remains bearish yuan going forward: if U.S. data recovers, rate hikes are delayed, but not canceled;
    • If U.S. data slumps and spreads globally, then it would put China in the position where it would need to borrow to keep growth up, but can’t because of it’s debt problem
  • Yuan falls 0.12% to 6.5720 per dollar
  • PBOC sets reference rate 0.18% lower at 6.5618
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Michael Every (Rabobank International)

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