Back
28 Feb 2014
Flash: PBoC keeps 'adjusting' the CNY - BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, noted the presence of the PBoC in today's CNY price action.
Key Quotes
"The foreign exchange market continues to show little sign of increased volatility apart from in China where once again the USD/CNY jumped sharply – indeed, according to our colleagues in Hong Kong the move from the mid-rate (6.1214) to the high of 6.1808 amounted to a 0.96% gain, which was the largest single-day drop since the revaluation in 2005. What is perhaps reassuring is that the PBOC fixing rate today was 10pips firmer than yesterday’s rate (6.1224)."
"We maintain that the current turnaround in USD/CNY remains a PBOC-engineered move as it seeks greater two-way volatility ahead of a band widening next month. Of course any weak economic data over the coming weeks may well fuel the concerns that this move is something more sinister but we remain unconcerned and expect real GDP growth of 7.7% this year, the very same growth rate as last year."
Key Quotes
"The foreign exchange market continues to show little sign of increased volatility apart from in China where once again the USD/CNY jumped sharply – indeed, according to our colleagues in Hong Kong the move from the mid-rate (6.1214) to the high of 6.1808 amounted to a 0.96% gain, which was the largest single-day drop since the revaluation in 2005. What is perhaps reassuring is that the PBOC fixing rate today was 10pips firmer than yesterday’s rate (6.1224)."
"We maintain that the current turnaround in USD/CNY remains a PBOC-engineered move as it seeks greater two-way volatility ahead of a band widening next month. Of course any weak economic data over the coming weeks may well fuel the concerns that this move is something more sinister but we remain unconcerned and expect real GDP growth of 7.7% this year, the very same growth rate as last year."