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15 Mar 2013
Forex Flash: USD/CNY holds bearish bias ahead - BTMU
FXstreet.com (Barcelona) - Bank of Tokyo Mitsubishi UFJ analysts are bearish USD/CNY and see spot moving between a range of 6.2075 and 6.2275 ahead.
They begin by noting that they have been watching this past week the persistence of USD/CNY selling. USD/CNH, which also saw persistent selling, was easier to understand with RQFII regulatory changes prompting expectations of greater CNH demand in the future. That overall USD/Asia moved up in general as we anticipated but USD/CNY did not was impressive. They write, “We think one driver has been the larger Chinese trade surpluses which, with our expectation of another year of USD 100bn FDI inflows, should be enough to drive the appreciation of the renminbi we expect. Trading action this past week implied March's trade surplus should be healthy as well. Official fixing have moved modestly downward, close to the level we had expected for the end of March.”
They begin by noting that they have been watching this past week the persistence of USD/CNY selling. USD/CNH, which also saw persistent selling, was easier to understand with RQFII regulatory changes prompting expectations of greater CNH demand in the future. That overall USD/Asia moved up in general as we anticipated but USD/CNY did not was impressive. They write, “We think one driver has been the larger Chinese trade surpluses which, with our expectation of another year of USD 100bn FDI inflows, should be enough to drive the appreciation of the renminbi we expect. Trading action this past week implied March's trade surplus should be healthy as well. Official fixing have moved modestly downward, close to the level we had expected for the end of March.”