USDCNY Battle Line At 6.60

The Economic Observer has an article with the headline: devaluation battle has begun.

There's a long discussion of various opinions on the yuan, but the mainstream consensus (or conclusion of the article) is that the USDCNY has two way volatility now, and 6.60 is the battle line against depreciation expectations. The U.S. dollar remains key though. One analyst said DXY was 100 when the market expected four rate hikes and fell to 93 when one rate hike was expected; it could move back to 95-96 if two hikes are expected. The analyst thinks the yuan could be vulnerable in the next couple of months, while another sees potential dollar strength in the autumn.

If the market is anchoring around 6.60 there is no room for any USD strength. One good up day for the dollar from present levels would likely break 6.60 level, certainly two big up days would do it——unless the central bank intervened. Once 6.60 breaks, 6.80 is in play.

EO: 猴年马月央妈在着急啥?人民币贬值保卫战已经打响

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