CNY (RMB) 02 (Feb 16 - Dec 25)

[behappyalways]

china-reserves-rise-on-valuation-as-brexit-boosts-haven-demand
http://www.bloomberg.com/news/articles/ ... ven-demand

[behappyalways]

World faces deflation shock as China devalues yuan at accelerating pace
http://www.telegraph.co.uk/business/201 ... rating-pa/

[behappyalways]

brexit-knocks-yuan-forecasts-to-7-a-dollar-at-ubs-goldman-rbs
http://www.bloomberg.com/news/articles/ ... oldman-rbs

[behappyalways]

大摩料明年人幣低見93.6
http://hk.apple.nextmedia.com/financees ... 1468922426

[winston]

Is China about to shock the market?

by Jim Rickards

Did the U.S. just double-cross China under the Shanghai Accord? If so, China will act on its own to devalue the Chinese yuan

Plunges of over 10% in U.S. stock indices happened twice in the past year. Both times it was because of a combination of a stronger dollar and weaker yuan. It’s happening again.

China is struggling under the weight of too much debt, poor demographics, and competition from lower priced suppliers in Vietnam, Indonesia, and the Philippines.

China needs economic relief. Fiscal stimulus just means more non-sustainable debt. China has too much of that already. The easiest way to give the Chinese economy a boost is to cheapen its currency, the yuan (CNY), to make its exports more competitive.

When China cheapens CNY, they encourage capital flight. The wealthy and well connected try to get their money out of China as quickly as possible before the next devaluation. This causes the dumping of Chinese stocks, which soon infects U.S. stock markets and causes a global liquidity crisis. The last two times China devalued, U.S. stocks fell over 10%.

The Shanghai Accord, agreed in Shanghai, China on February 26, 2016 was an effort to give China some relief without having to devalue CNY against the U.S. dollar (USD). The solution was to keep CNY pegged to USD, but weaken USD against the euro and the yen. China has a larger trading relationship with Europe and Japan than it does with the U.S.

Capital outflows from China will be one of the main indications and warnings we’ll be watching in the months ahead to judge the impact of this latest Chinese devaluation.

Source: Currency Wars Alert

http://thecrux.com/jim-rickards-is-chin ... he-market/

[behappyalways]

人幣看淡　內地走資未受控
http://hk.apple.nextmedia.com/financees ... 1469543292

[behappyalways]

China FX Reserves Stabilize on Weaker Dollar, Less Intervention
http://www.bloomberg.com/news/articles/ ... tervention

[winston]

Capital Leaving China At Fastest Pace Since January

By Shuli Ren

China’s capital flight story is just not going away.

As of the end of August, China’s foreign exchange reserves came in at $3,185 billion, a $16 billion decrease from July. The street had expected $3,190 billion in FX reserves.

China’s FX reserves is now at its lowest since December 2011.

“Looking ahead, outflows may ease somewhat this month given that disappointing US data has pushed back expectations for a Fed rate hike.

Nonetheless, the key takeaway is that although concerns about China are no longer front page news, capital outflow pressures haven’t gone away.

We expect the PBOC to respond to these pressures by continuing to allow gradual renminbi depreciation,” wrote Capital Economics‘s Julian Evans-Pritchard.

Source: Barron's Asia

[behappyalways]

Yuan Intervention Signs Intensify as Offshore Loan Rates Surge
http://www.bloomberg.com/news/articles/ ... ates-surge

[winston]

Yuan borrowing costs surge higher

The cost of borrowing yuan in Hong Kong surged to a seven-month high amid speculation China's central bank is intervening to discourage bearish bets on the currency.

The overnight Hong Kong Interbank Offered Rate climbed 3.88 percentage points to 5.45 percent, the most expensive since February. The one-week rate rose 2.09 percentage points to 4.06 percent.

The People's Bank of China may have tightened liquidity in the offshore yuan market to control declines following speculation that it would allow depreciation now that a Group of 20 summit is over, according to Mizuho Bank Ltd.

The monetary authority drove offshore yuan borrowing costs to unprecedented levels in January in an effort to punish bears.

"The authorities may be repeating January's trick -- tighten liquidity and crack down on bearish speculation on the yuan," said Ken Cheung, a foreign- exchange strategist at Mizuho

China's central bank can influence funding costs in Hong Kong by encouraging state-owned banks to hold back from lending their excess yuan.

A surge in yuan HIBOR hurts bears in two ways: by increasing the cost to borrow the currency and sell it, and also by prompting lenders that want to avoid paying the higher rates to buy the yuan they need in the spot market instead, bolstering the exchange rate.

Source: BLOOMBERG