USD/CNY: Marginal upward pressure - Westpac

According to Frances Cheung, Research Analyst at Westpac, the latest China RRR cut, effective 15 October, was not a surprise but the amount of liquidity injected (after offsetting MLF) was slightly bigger than expected.

Key Quotes

“Furthermore, the risk is for more easing to come, if the authorities judge that more support to growth is needed. While interest rate differentials may not be the most important factor driving USD/CNY, as it gets more unfavourable for the CNY it nevertheless is adding marginal upward pressure on USD/CNY.”

“The dollar may stay strong, supported by higher yields. The next resistance for the pair remains at the Jan 2017 high of 6.96.”

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.