Trade-weighted CNY is within 3 month ranges - Westpac

Sean Callow, Research Analyst at Westpac, suggests that on their estimate, trade-weighted CNY is within 3 month ranges but up since the US election (Bloomberg code ATWICNY).

Key Quotes

“But this is a tough story to sell to local investors when USD/CNY has just blown through the 6.83 post-GFC area to 8+ year highs and USD/CNH is in uncharted territory. Officials are likely to have to keep walking a difficult line between allowing USD/CNY/CNH to follow broad USD gains (still probably producing a rising TWI) and fighting the trend, fearing self-reinforcing yuan decline. If US Treasury yields slip back near term, the reprieve is likely to be brief. The 12mth NDF should chop towards 7.15, CNY to 6.90 and CNH 6.95.”