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28 May 2015
USD/CNY: Watch rates in China - BTMU
FXStreet (Guatemala) - The Bank of Tokyo-Mitsubishi UFJ, Ltd noted the conditions surrounding USD/CNY.
Key Quotes:
"We think rates start to rise past month-end: i) PBOC's repo signaled short-term withdrawal of liquidity; ii) it's tax-payment time; iii) there are IPOs still coming; and, iv) offshore still has the annual MOF issuance. An even better view than rising rates is a steeper curve."
"Not that any of this matters for the currency, which doesn't trade on rates. We've seen some 50-pip range days that reminded us of two band widenings ago."
"We advised last month to begin to position for strengthening, so we're watchful not only of bottoming but actual improvement in economic indicators as we progress through May."
Key Quotes:
"We think rates start to rise past month-end: i) PBOC's repo signaled short-term withdrawal of liquidity; ii) it's tax-payment time; iii) there are IPOs still coming; and, iv) offshore still has the annual MOF issuance. An even better view than rising rates is a steeper curve."
"Not that any of this matters for the currency, which doesn't trade on rates. We've seen some 50-pip range days that reminded us of two band widenings ago."
"We advised last month to begin to position for strengthening, so we're watchful not only of bottoming but actual improvement in economic indicators as we progress through May."