Selling of USD to remain modest until there is further clarity on Evergrande’s position – MUFG
|The Chinese real-estate giant Evergrande made a payment of $83.5 million on bond interest. Evergrande has a number of payments still to make going forward and without full clarity on this payment and plans ahead, uncertainty is likely to continue, which should limit selling of USD, economists at MUFG Bank brief.
Hang Seng Property Index rebounds sharply easing USD demand
“The Hang Seng Properties Index has now rebounded close to 20% from the lows in September and we believe the general turn in sentiment is one factor behind the turn weaker for the US dollar in October.”
“But uncertainty remains high. There is some evidence that the real estate market in China has seen contagion. In addition, the impact on the real economy through a sharp slowdown in real estate activity could be a reality going forward unless the authorities can act to restore confidence.”
“On 29th October another payment of $45 M is due with the 30-day grace period ending. So for now these upcoming dates will probably contain the rebound in risk related to the relief of default being avoided. So selling of the USD should remain modest until there is further clarity on Evergrande’s position and the position of other property companies in China.”
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.