ANZ say that it is unlikely the People's Bank of China will defend any particular level

  • Yuan weakness predominantly driven by dollar strength
  • RMB Index has remained within a stable range
  • Authorities may act to limit the volatility of the moves
  • But unlikely they will defend any particular level
  • Uncertainty over whether US President-elect Trump will label China a currency manipulator is also weighing on the yuan

Forecasts:

  • We see scope for further dollar strength, and are downgrading our CNY forecasts:
  • USD/CNY to end the year at 6.90
  • And 7.10 by the end of 2017 (previously 6.75 and 6.85, respectively)