Yuan Devaluation Debate...As USDCNY Blasts Past 6.70

If the rise in LIBOR and the TED spread are not due to changing money market rules, the yuan is going to be under pressure once the entry into the SDR basket is complete. At some point the possibility of Trump victory, or post-Election Day reality, will also be a factor.

Update: USDCNY opens above 6.73. Bad data! USDCNY stayed at 6.67.

iFeng: 人民币周报:空头们怕了吗?离岸人民币又有大动作!
German commercial banks: offshore renminbi financing costs soar China's central bank show an increase in the cost of short yuan, in order to reduce devaluation pressure. But for the short-term stability of the RMB exchange rate, the central bank's policy will not only undermine confidence in the market, frequent interventions will make the market that the yuan Zoubian is inevitable, leading to capital outflows intensified.

Goldman Sachs: the probability of rate hikes at least once a year the Fed is very large, but the market is still unwilling to face the possibility that the upstream end of the dollar means entering space increases. It is time to establish the yuan short positions, because the strength of the dollar for China is still a stumbling block.

Standard Chartered: Expected end of this year dollar / yuan exchange rate will remain 6.67 to 6.7, mainly because the United States is expected before the end of this year can not afford to raise interest rates, is expected to be the fastest or 2018 will raise interest rates, the market interest rate is expected to weaken against emerging market currencies dollar support.

Hang Seng Bank: Before the end of September FOMC rate decision, offshore renminbi liquidity will remain tight situation; In addition, in the past offshore renminbi liquidity easing, market participants in the long-term market borrowing tends to short end, lend long end, market participants now see the short end of the interest rate is difficult to fall, the market is long-term operation of a flat disk.

Citigroup: China's economic growth is expected in the second half is still facing greater uncertainty, estimated this year or will the central bank cut the deposit reserve ratio, short-term bearish yuan. But because of the sharp depreciation of the yuan in August last year caused by the financial market turmoil, or the central bank is expected to be slow and orderly control of the yuan devaluation.

Not to devalue the renminbi devaluation? Three government think-tank position are differences

The central bank monetary policy committee member Fan Gang: The current rate hike cycle in the United States, long-term bullish dollar, the RMB should not follow the US dollar rose, but should be followed by other weaker currencies; Chinese government will appropriately control the exchange rate, allows a slow devaluation.

Institute of Finance, the State Council Development Research Center Director Blending : RMB internationalization process was not always smooth, slowed down last year after 8.11, but the international trend intact. RMB internationalization may be wavy, sometimes fast, sometimes slow. RMB stable and rising momentum in the short term is difficult to reproduce.

Monetary affairs committee Yiping Huang: the future of the RMB exchange rate will fluctuate, but the risk of facing persistent downward pressure is not great. Devaluation of the renminbi is expected partly because of market prospects for China's economic growth prospects relatively pessimistic, corporate leverage and high rate of bad debts caused by concerns about pressure on the yuan exchange rate to capital outflows, and the impact of the major developed countries monetary policy differentiation. However, even if the yuan relatively weak dollar, but also possible for the euro , the yen strengthened, against a basket of currencies still remain stable.

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