Wednesday, January 6, 2016

Offshore rate below 6 72 Yuan devaluation of the year five reasons conjecture

Offshore rate below 6.72 Yuan devaluation of the year five reasons conjecture

Just three trading days, the spot exchange rate in 2016 has devalued more than 0.8%. China Visual information

New year's to a falling currency decline has not yet shown signs of reversing.

The day before the appreciation of the Yuan against the US dollar spot rate 16:30 to close, but on January 6, people's Bank of China (PBoC) median price sharply lower again, directly sparked renewed offshore. Revival of the concept of State owned enterprise

9:15 in the US after the offshore Yuan fell against the dollar from around 6.6370 plunged 400 basis points to 6.6877, plunged more than 0.6% in a single day. Between 14:30 and offshore exchange rate dropped to a maximum of 6.6965, close to 6.7, between 16:11 and offshore rate below 6.7 followed offshore quickly, in as little as 20 minutes and succession of 6.71 6.72, and 16:32, fell to the intraday low of 6.7241.

Compared with the previous session's closing price 6.6471 and down 770 bps, devaluation of nearly 1.16% in a single day.

In the onshore market has calmed many, the spot exchange rate of RMB to $ 6.5575 closing 16:30. This year fell nearly 1%.

This year, the offshore renminbi has devalued by more than 2.2%.

And today its offshore markets triggered the riots, is a further downward adjustment in the Yuan against the US dollar.

January 6 middle prices of RMB 145 points to 6.5314, lowest since April 2011. Three days of the new year, devaluation of the RMB central rate has accumulated 378 basis points.

More representative of the market expected spot exchange rate movements is similar to offshore markets, 6.5272 quickly after opening lower, US dollar to 6.5490 at one point, distance of 6.55 points is just a step away.

Just three trading days, the spot exchange rate in 2016 has devalued more than 0.8%.

Why the Yuan even fell, I couldn't help?

Guess: $ 50,000 to buy the amount of recovery

With the arrival of 2016, annual purchase limit of $ 50,000 per year per person to update, affected by the devaluation of the renminbi is expected, whether central purchase of foreign exchange for personal new year's concerns are part of into reality.

Including the CICC, sinolink securities, a number of organizations are of the view that large-scale swap on the devaluation of the Yuan is reflected at the beginning.

Guess two: end of Central Bank to test the market

Is visible, immediate currency depreciation in trigger point was regarded as Central Bank will of the US surprise lower.

January 4, the first trading day of the Yuan central parity against the dollar by 96 basis points reduction from "811" new high since the exchange rate reform, reinforced the devaluation expected in the onshore and offshore markets, followed by two days, once again fell 137 and 145 basis points, respectively.

National investment bank Goldman Sachs noted in a recent report, recently showed the Chinese Government guide the strong intention of the devaluation of the Renminbi.

Gold companies were of the view that effective communication on policy positions, and maintain the position of the drastic measures, helps reduce when market "herding effect". Markets have yet to see concrete progress in this regard.

Guess three: the Federal Reserve raised interest rates a further rise is expected

Had the Fed raise interest rates under the button, next shot when and is a destabilizing factor hanging in Renminbi.

CITIC Securities believes the Fed raising interest rates 1% (four times a year) background, United States 10-year bond yields will rise, or to 3.2-3.3% or so, compression of spreads between China and the devaluation of the Chinese currency 5% of space, even at about 400 billion yuan of capital outflows.

Guess four: recovery will take the exchange rate adjustment support

Societe Generale Chief Economist, Lu zhengwei was expected 2016 Yuan against the US dollar will decline in value of 15% for the year, reaching 7.3 per cent. He said China's economic recovery needs of RMB real effective exchange rate adjusted accordingly; Yuan against the dollar is the second industry fundamentals to improve Chinese companies in particular, and is also in the currency market, capital account convertibility and monetary policy independence "impossible triangle" the only key to ensure the independence of the Central Bank's monetary policy.

Guess v: stability CFETS RMB exchange rate index

Liu Dongliang, China Merchants Bank senior financial market analyst believes that after new year's day the significant devaluation of the Yuan, is mainly due to significant dollars after a strong, non-us currencies such as euro, if the currency does not move, the CFETS index is bound to rise, and to maintain basic stability of CFETS index, devaluation of the Yuan to the dollar, us to some extent played a role in leading market trends.

On December 11 last year, China released CFETS foreign exchange trading center in China's currency the Renminbi exchange rate indices for the purpose of, is "to facilitate the marketing of RMB effective exchange rate changes from different angles", the Central Bank also have high hopes for this, said market players in the future should not be pegged to the dollar, but more with reference to a basket of currencies, of course, this requires a process to adapt.

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