Forex Flash: USD/CNY looks bearish ahead – BTMU (Barcelona) - Bank of Tokyo Mitsubishi UFJ analysts are bearish USD/CNY for the week ahead and see spot moving between 6.2000-6.2350.

They note that authorities have already fixed below where their most bearish 1 month target assumed the fix would be at the end of January, but spot selling pressure should persist (again, signalled by the persistent discount of USD/CNH to USD/CNY).

They are continuing to emphasise that the exchange rate is but a handmaiden to larger economic goals, the substance of which before the NPC still appears a little vague. They write, “Nonetheless it's probably in official interests to have a stable but not earthshaking year of growth (consistent with our 8% expectation) and we continue to think a moderately appreciating currency makes overall macroeconomic management easier.”