USD/CNY weekly
Jamie MacGyver of Reuters comes out with a good column on the conundrum China faces as it seeks to stimulate the economy. He highlights that the moves could spark a rise in the yuan and that USD/CNY may also fall with US stimulus.
He cites Stephen Jin – a great FX analyst – about the possibility of the yuan becoming stronger.
Stephen Jin, co-founder of hedge fund Eurizon SLJ and a long-time China follower, believes Beijing is stuck between a rock and a hard place. As the Fed’s easing cycle continues, the dollar’s floor against the yuan is certain to fall.
“I still think USD/CNY is headed lower, perhaps 10% next year. Almost everyone is on the wrong path. Adjusting the positions will make this potential decline non-linear,” he wrote on Wednesday.
I tend to think that the impact of the yen on exports is exaggerated and that China has a lot of tools to influence the currency, especially if it wants to weaken it, but China has a lot of tools to influence the currency. column It is a good read.
Also note that Goldman Sachs is On the other side From Jin Trading, saying there will be no rush to sell dollars and buy yuan in China.