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  • Article / 29 June 2018 at 14:04 GMT

    EM FX Weekly: Focus on China on recent CNY slide

    Head of FX Strategy / Saxo Bank
    Denmark
    EM FX Weekly: Focus on China on recent CNY slide
    China has seized the market’s attention by allowing a sharp slide in the renminbi over the past two weeks, as investors ponder whether this is merely a signal that China is no longer interested in seeing its currency strengthen versus the official reference basket or if it is “weaponising” the renminbi in the trade showdown with the US.
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  • Article / 22 January 2018 at 2:28 GMT

    Morning Report APAC: Asian stocks mixed, US shutdown in focus

    APAC Sales Trading Desk / Saxo Capital Markets
    Singapore
    Morning Report APAC: Asian stocks mixed, US shutdown in focus
    Asian equities were mixed today, with investors wary about the impact of the US shutdown on markets. Squabbling Democrats and Republicans have brought on the shutdown, with a stopgap solution likely at best. Meanwhile politicians in Berlin have set aside their differences, and look ready to form a coalition.
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  • Article / 14 October 2016 at 6:56 GMT

    Morning Markets: Skittish stocks boost safe havens

    Head of Editorial Content / Saxo Bank
    Denmark
    Morning Markets: Skittish stocks boost safe havens
    The impact of disappointing China trade data was felt in Asia today as APAC bourses followed Wall Street into the red on a broad risk-off mood. Today sees the US out with a retail sales print and a speech from Fed chair Janet Yellen, both of which could move the dollar and equities if there are any surprises.
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  • Editor’s Picks / 16 June 2016 at 1:00 GMT

    MSCI shock casts doubt on yuan internationalization

    Nikkei Asian Review
    MSCI's decision to postpone the inclusion of Chinese A shares into a key stock index drove the yuan weaker on Wednesday, dealing a blow to Beijing's efforts to make it a global currency. In what a Hong Kong investment banker called with intended exaggeration the “MSCI shock”, the yuan fell in the offshore market following the decision. Beijing's heavy-handed interventions following last year's domestic-stock crash and yuan plunge eroded investor confidence. “International institutional investors clearly indicated that they would like to see further improvements in the accessibility of the China A shares market before its inclusion in the MSCI Emerging Markets Index,” said Remy Briand, MSCI managing director and global head of research.
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  • Article / 19 April 2016 at 9:51 GMT

    Quiet in the currency market won’t last

    Head of FX Strategy / Saxo Bank
    Denmark
    Quiet in the currency market won’t last
    Exchange rates have gone very quiet in recent days and even weeks as investors are at a loss to find the next major driver in this market. But the calm is only temporary – powerful new drivers including Brexit, the US election and maybe even Japanese helicopter money lie ahead.
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  • Editor’s Picks / 11 April 2016 at 0:26 GMT

    Think Beijing is about to devalue the yuan? Think again

    Business Spectator
    Some market participants anticipate that China will soon devalue the yuan by a large amount or that market forces will force a large depreciation. But this narrative has fundamental flaws. Start with the exchange rate. Yes, the yuan has appreciated significantly over the last decade, but that does not support the view that the currency is now overvalued and due for a sharp correction. China’s currency was massively undervalued in the mid-2000s and the cumulative real appreciation since then led the IMF to judge in 2015 that the exchange rate is at a level “that is no longer undervalued”. Moreover, there is not much evidence that yuan appreciation has undermined China’s global competitive position.
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  • Editor’s Picks / 07 April 2016 at 23:08 GMT

    Rise in China's forex reserves steadies the yuan

    Nikkei Asian Review
    China's forex reserves increased on the month for the first time since October as receding speculation about a US interest rate hike alleviated downward pressure on the yuan, freeing the People's Bank of China to scale back intervention. The reserves grew $10.2 billion to reach $3.21 trillion at the end of March. China's forex reserves – the world's largest – had shrunk $320bn over the four months to February. As a sluggish economy combined with expectations of a US rate hike put pressure on the yuan, the PBoC drew on its stock of dollars to prop up the currency. The March upswing will likely enable China to avoid for now a vicious cycle of mounting market concern about plunging reserves driving further yuan depreciation.
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  • Editor’s Picks / 03 April 2016 at 21:38 GMT

    China's FX reserves could fall through $3 trillion floor

    Nikkei Asian Review
    Chinese forex reserves threaten to dip below $3 trillion, keeping observers on edge for any hint of renewed yuan market turbulence. The PBoC reports on the nation's reserves for the end of March on Wednesday or Thursday. The balance stood at $3.2 trillion at the end of February, down $28.6 billion from January. Spending has likely slowed over the past month. But the psychologically important barrier draws nearer. China has used vast amounts of its dollar reserves to buy up yuan and halt its slide, spending around $100bn a month through January. The falling balance fanned distrust in the economy, inviting further yuan outflows.
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  • Editor’s Picks / 17 March 2016 at 22:08 GMT

    Why China will dodge the yuan devaluation trap

    South China Morning Post
    Will the yuan be devalued again? As both Premier Li Keqiang and Bank of China governor Zhou Xiaochuan have assured the public, the yuan is unlikely to devalue abruptly and significantly, although there may be small fluctuations. A devaluation that is not well communicated and/or justified can negatively affect confidence in the currency and by extension in the economy. A loss of confidence can lead to negative expectations about the future, which can be self-fulfilling, resulting in no or low economic growth, which in turn will confirm and reinforce negative expectations, creating a vicious cycle. This has been happening in Japan for two decades. It is important for China to avoid such a trap.
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