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21 Feb 2013
Forex Flash: USD/CNY has bearish tone - BTMU
Bank of Tokyo Mitsubishi UFJ analysts feel that USD/CNY looks bearish ahead and may move between a range of 6.2250-6.2500.
They write, “Our fundamental interpretation in China during February is of an exchange authority who, in the face of new global policy bents (the ECB hinting at discomfort with stronger euro and the FOMC now talking openly about the costs/benefits of future QE3) and regional developments (caution about the weaker yen), has once again opted to keep USD/CNY more or less stable for a month.”
They feel that this has been a time honoured pattern, but now with USD/CNH in premium to USD/CNY, market interest is in pushing the cross higher. However, with a week ahead where both higher USD/JPY has to be justified and the immediate hawkishness of the FOMC could be open to re-questioning, they foresee a bit of a retracement.
They write, “Our fundamental interpretation in China during February is of an exchange authority who, in the face of new global policy bents (the ECB hinting at discomfort with stronger euro and the FOMC now talking openly about the costs/benefits of future QE3) and regional developments (caution about the weaker yen), has once again opted to keep USD/CNY more or less stable for a month.”
They feel that this has been a time honoured pattern, but now with USD/CNH in premium to USD/CNY, market interest is in pushing the cross higher. However, with a week ahead where both higher USD/JPY has to be justified and the immediate hawkishness of the FOMC could be open to re-questioning, they foresee a bit of a retracement.