CNH rates squeeze once again pushing USD/RMB down - BTMU

Cliff Tan, East Asian Head of Global Markets Research at Bank of Tokyo-Mitsubishi UFJ in Hong Kong, noted in its latest report that fx intervention by the Chinese authorities have failed to provide any support to the Yuan, adding that they may succumb to the “timeless siren.”

Key Quotes:

“As we head to press the (almost) annual CNH rates squeeze is once again pushing USD/RMB down” 

“You can call this two-way volatility but it’s probably not the end of the one-way bet”

“We’re wary should authorities succumb to a timeless siren which tells them it’s speculators who are frustrating their policy desires and not good old-fashioned, boring fundamentals”

“If China goes another year without serious restructuring, then 2018 may show authorities just how decisive markets can be”