China Starts Walking Back USDCNY 7 Redline

Caixin: Yuan's Rough Month Sets Stage for China to Rethink Key 7 Level
A miserable month for China’s yuan is pressuring officials to decide how much they care about defending 7 a dollar.

...“The central bank is trying to smooth that pace of depreciation, but this is something that cannot be stopped by anybody’s will," said Linan Liu, a greater China macro strategist at Deutsche Bank AG. “It’s understandable the currency needs to adapt given the risk of the current account turning to deficit, economic growth slowing and slower investment flows or outflows.”
Adjust to what? It is being propped up by extremely strict capital controls. The market might want to have a debate about USDCNY 8 or higher.
Chi Lo, a greater China senior economist at BNP Paribas SA’s asset management arm, said a yuan weaker than 7 might push Beijing and Washington back to the negotiating table. That’s because a breach could trigger currency depreciation across the region and hurt U.S. equities, spurring President Donald Trump to make a deal, he said.

“I do not think the PBOC has a line in the sand at 7,” he said. “The PBOC may increase its tolerance of a weak renminbi that is driven by market forces.”
Sadly, letting Asian currencies reset would be the first domino for a global currency reset that will finally end this 10 year depression. In the 1930s, countries quickly abandoned or devalued against the gold standard, but here we are 10 years into a depression and the world is still clinging to a misvalued eurodollar system because governments and central banks refuse clearing the debt overhand with default and/or "competitive" devaluation, while the U.S. and others also refuse to countenance a monetary reset.

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