13 Aug 2015
Renminbi could remain under pressure – BTMU
FXStreet (Edinburgh) - Lee Hardman, Currency Analyst at BTMU, believes the Chinese currency faces further downside pressure in the next weeks.
Key Quotes
“PBoC Deputy Governor Yi Gang was even more explicit describing reports stating that the PBoC wants to devalue the renminbi by 10% as “nonsense”.
“He believes that the new fixing mechanism is positive for the internationalization of the renminbi with the aim to have the market determine the exchange rate”.
“He added that the PBoC has already exited regular intervention”.
“The flexible exchange rate is seen as facilitating capital flows as China is gradually realizing their existing plan to open the capital account”.
“Market moves won’t change China’s capital account convertibility agenda”.
“The developments from overnight support our Hong Kong analysts’ view that China does not intend to enter into a global “currency war by significantly devaluing the renminbi”.
“Still, the renminbi may remain under some modest downside pressure heading into the timing of the first Fed rate hike”.
Key Quotes
“PBoC Deputy Governor Yi Gang was even more explicit describing reports stating that the PBoC wants to devalue the renminbi by 10% as “nonsense”.
“He believes that the new fixing mechanism is positive for the internationalization of the renminbi with the aim to have the market determine the exchange rate”.
“He added that the PBoC has already exited regular intervention”.
“The flexible exchange rate is seen as facilitating capital flows as China is gradually realizing their existing plan to open the capital account”.
“Market moves won’t change China’s capital account convertibility agenda”.
“The developments from overnight support our Hong Kong analysts’ view that China does not intend to enter into a global “currency war by significantly devaluing the renminbi”.
“Still, the renminbi may remain under some modest downside pressure heading into the timing of the first Fed rate hike”.