An opinion article in China's Economic Daily says that the yuan is "likely to maintain a two-way fluctuation"
- And warns that "market participants should not bet on a prolonged one-way decline”
The piece goes on saying supportive policy will be maintained, with an appropriate monetary environment
- economic recovery is unbalanced
- the global pandemic outlook remains uncertain
- domestic inflation is moderate and controllable
And
- yuan-denominated assets such as stocks and bonds continue to attract foreign investment
- have large growth potential
On the USD:
- appreciation may also be constrained, helping keep China-US rate spread stable, as the Federal Reserve will slow its policy normalization to prevent bursting asset bubbles
USD/CNH daily:
