The People’s Bank of China precipitate forex volatility again today
OK, a quick look at where we've been and where we are at:
The USD/CNY mid point fixing from the People’s Bank of China:
- Yuan fixing to its weakest since April 2011
- Another sharp yuan devaluation, the biggest change for the day in 2 months
'Risk' didn't like it ... AUD and NZD hit lower, while the yen loved it ... you know what that did to the crosses, right? ;-): AUD and NZD / yen getting smashed
Meanwhile, the Chinese sharemarkets have stabilized a little today. There's been plenty of 'supporting' news out for it:
- China - about 30 companies gave a commitment that they "will not sell shares"
- China stockmarket sellers ... let the arrests begin!
- China Securities Journal says little risk of further sharp yuan depreciation .... errr, yeah, right (see above ... biggest devaluation in 2 months)
- China to keep ban on major shareholders offloading shares until new rules promulgated
Shanghai Composite up 0.73%
(ps. Offshore CNH is at its weakest in 5 years)
OK ... but what about 'where are we going'?
Its all about Chinese equity markets. And good luck divining that.
It looks to me like we will get some topside retracement, but its very precarious and sellers will be waiting not too far in the wings. This is not a time to get wedded to a view, stay small and nimble would be my advice. But, you've probably figured that out already.