USD/CNY: Volatility interpreted as more to the downside - Westpac

USD/CNY was fixed lower in the past days, after PBoC Governor Zhou’s comments on FX reform, among other topics, points out Frances Cheung, Research Analyst at Westpac.

Key Quotes

“Stance on further FX reform should lead to more two-way fluctuations in the RMB. These comments came at a time with various indicators pointing to reduced outflow pressure, continued tightening measures on ODI, expectation for support ahead of the NPC and a pause in USD strength – hence the two-way volatility might have been interpreted as more to the downside for USD/CNY for now.”

“That said, we expect less aggressive USD/CNY fixing from now heading into the NPC, if stability remains the prominent short-term policy aim, despite medium-term vision for higher volatility. We expect range-trading in spot CNY in the coming days.”

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 securities. 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 Forex 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.