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Daily Kickstart (China FX Edition)

Whither the yuan...

Well, just as a weak yen propelled Japanese equities to a blockbuster start to 2017 on Wednesday, so has a stronger yen weighed on shares in Thursday trade. As tipped here a few hours back, the dollar fell sharply against its G10 peers in early overnight trade as traders reacted to the release of the Dec. Fed minutes and trimmed positions ahead of Friday's NFP data. The Nikkei fell around half a percent. Meanwhile, the offshore yuan advanced as much as 2.5% as deposit rates and forward points surged to records on tight liquidity. (Chart: Bloomberg) “Given the recent capital controls, the channels for domestic institutions and retails to bring out onshore cash to the offshore market have also been tightened,” Becky Liu, a rates strategist at Standard Chartered told Bloomberg. “There is a lack of supply of yuan liquidity.” Here are the important bullets via Bloomberg: CNH rallies for fourth day, +0.6% to 6.8232 per dollar as of 6:24pm in Hong Kong after earlier rising as much as 1.2%; CNY advances 1.1% in two days, most since 2005, to 6.8856 per dollar CNH tomorrow next forward points climb 210.5 pips to
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1 comment on “Daily Kickstart (China FX Edition)

  1. […] yuan (NYSEARCA:CYB) is of course riding high and that, in turn, facilitated a broad based USD (NYSEARCA:UUP) rout. Have a look at the offshore […]

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