CNY: Yuan(ted) lower - TDS
|Analysts at TD Securities explained that they have reached our end of year target for USDCNY early as Chinese policymakers have allowed for a more rapid pace of adjustment to fundamental factors than we had expected.
Key Quotes:
"We thus revise upwards our view for USDCNY to reach 7.10 by year-end, before topping out near 7.20 at the end of Q1'19."
"This is based on our view that domestic Chinese policy constraints on the monetary and regulatory front leave the CNY REER as the operative shock absorber and main adjustment variable for monetary conditions to buffer the economy."
"We see the potential for another 3%-4% CNY REER depreciation to bring monetary conditions to more neutral relative levels."
"This however remains a key fundamentally-driven adjustment to bring CNY more in line with other Asian REER developments over the past year, and should not be interpreted as tool used to "punish" in the ongoing U.S.-China trade dispute."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.