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3 Apr 2015
USD/CNY neutral bias for the week ahead – BTMU
FXStreet (Barcelona) - The Research Team at Bank of Tokyo-Mitsubishi UFJ, maintain a neutral bias for USD/CNY for the week ahead, expecting the pair to remain in the 6.1750-6.2150 range.
Key Quotes
“We're not completely sure if PBOC has solved its problem of creating liquidity when capital was flowing out (as in 4Q14). But recent money market rate drops haven't seemed too difficult, perhaps because, as SAFE told us, capital is flowing back into China. So we also suspect 1Q15 foreign reserves will surprise to the high side, which will provide support for CNY.”
“The economy we think is bottoming but we're not yet sure if this will be smooth. Any eventual recovery could restore confidence in CNY, and we believe price action since mid-March (orchestrated by PBOC) has probably curbed some bullish enthusiasm, for now.”
“We expect a +ve surprise for total social financing, too, showing monetary taps fully open; but till more fiscal stimulus kicks in we won't see much effect on the economy.”
“Fixings should remain neutral for now.”
USD/CNY – Neutral Bias – (6.1750-6.2150)
Key Quotes
“We're not completely sure if PBOC has solved its problem of creating liquidity when capital was flowing out (as in 4Q14). But recent money market rate drops haven't seemed too difficult, perhaps because, as SAFE told us, capital is flowing back into China. So we also suspect 1Q15 foreign reserves will surprise to the high side, which will provide support for CNY.”
“The economy we think is bottoming but we're not yet sure if this will be smooth. Any eventual recovery could restore confidence in CNY, and we believe price action since mid-March (orchestrated by PBOC) has probably curbed some bullish enthusiasm, for now.”
“We expect a +ve surprise for total social financing, too, showing monetary taps fully open; but till more fiscal stimulus kicks in we won't see much effect on the economy.”
“Fixings should remain neutral for now.”
USD/CNY – Neutral Bias – (6.1750-6.2150)