USD/CNY: Near-term weakness remains ahead of monetary policy moves – ING
|USD/CNY weakened over the past month from around 7.25 to 7.27. Another month of soft data has increased the odds of easing in the next few months, ING’s FX analysts note.
USD/CNY weakens in the past month
“USD/CNY weakened over the past month from around 7.25 to 7.27, reflecting capital outflows amid market weakness and broader dollar strength. The People’s Bank of China (PBOC) usage of the counter-cyclical factor hit a new high in July.”
“Another month of soft data has increased the odds of easing in the next few months. However, the PBOC also announced it would start borrowing bonds to sell and try to cool the government bond rally. The net impact on yields is unclear.”
“We are adjusting our CNY forecasts weaker as yield differentials will remain unfavourable until the Fed starts easing.”
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.