It wasn't all that long ago the 'experts' were telling us of the death of the US dollar and that the new global reserve currency would be the yuan. Anyway, moving on ....
MUFG:
- The latest developments suggest that the fresh infrastructure stimulus announced will provide only a short-term boost for market sentiment towards the Chinese economy.
- The Chinese renminbi has strengthened following the PBoC’s decision to set a stronger expected daily fixing rate. It sends a signal to market participants that policymakers in China are unhappy about the recent faster pace of renminbi depreciation. The pushback from the PBoC is though unlikely to reverse the weakening trend that is currently in place.
- “Heightened concerns over economic weakness in China and the PBoC’s decision to lower rates further should keep downward pressure on the renminbi against the US dollar.
Here's the daily CNH chart.
- USD/CNY is the onshore yuan. Its permitted to trade plus or minus 2% from this daily reference rate.
- CNH is the offshore yuan. USD/CNH has no restrictions on its trading range.
