Plenty of chatter about on the yuan today reflected in items from all over the place:
- FT headline: 'China weighs allowing the renminbi to 'crack 7'. But no indication they are.
- US Commerce dept proposes imposing duties on countries that undervalue their currencies relative to the USD
- More on the US to impose tariffs on countries that undervalue their currencies
TD on the yuan:
- 7.00 level will be allowed to eventually fall if seen as fundamentally necessary
- Considerations regarding the need to adjust against tariff impact as well as preserve FX reserves against much higher external debt levels should dominate China's priorities
- remain bearish CNY, seeing the need for further macro adjustment, and the risk that additional U.S. actions drag on China's economy, during a drawn-out trade war
- continue to see 7.20 achieved in the coming months (though the near-term defence of 7.00 may delay that)