CNY: Holding the line – ING

There has been a fairly limited impact on the renminbi following Trump’s social media posts, notes Chris Turner, FX analyst at ING.

Chinese authorities are trying to keep USD/CNY below 7.20

“Currently, the Chinese authorities are trying to hold the line by keeping the USD/CNY fixes in the domestic market below 7.20. This limits how high the USD/CNY can trade and also indirectly how high the USD/CNH can trade. “

“The Chinese authorities are playing the long game here and will not be devaluing the renminbi for some short-term gains for local exporters. We believe the authorities are much more interested in preserving the renminbi’s status as an international reserve currency and avoiding capital flight (although foreigners are already underweight in Chinese asset markets).”

Source: Fx Street

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