Deutsche Bank Estimates Dollar Dependent USDCNY Depreciation

One of the reasons a yuan depreciation was forecast here was because the economic cycles in China and the U.S. were diverging and with them the underlying currency cycles.

Deutsche Bank does some math and calculates how much the Chinese yuan will likely depreciate solely due to a broad USD rally.

ZH: How Low Will The Yuan Go? Deutsche Bank Answers
Put simply, the more global currencies weaken against the USD, so will the yuan. The easiest point of reference is the new CNY trade- weighted index published by the authorities last year. Taking the hypothetical case of a uniform drop of 5% in all world currencies against the dollar, this implies USD/CNY has to rise by around 15% to keep the yuan stable at current levels (chart 1). This of course implies that the currency is indeed kept stable rather than actively weakened, with the markets likely to closely watch whether we breach the key 100 level in coming weeks (chart 2).

...Put simply, if China allows USD/CNY to appreciate in line with dollar strength against other currencies, the broad trade-weighted dollar will appreciate by even more. Taking the September 2014 – April 2015 euro weakening period as a template, the broad dollar would have appreciated by 3% more had the Chinese authorities moved USD/CNY higher to offset weakness in EUR/CNY.

Throw out everything else on the yuan. The US Dollar Index has upside targets of 120 and above, currently sits at 100. Those are not the most bullish targets. By DB's math, a major depreciation of CNY is in the cards if the dollar experiences another bull rally before this bull market ends.

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