Barclays says it expects the USD/CNY to continue grinding lower as the Fed's latest easing and the ECB's promise to buy peripheral eurozone bond will likely keep risk appetite buoyant. The house also says the pair's fall since end-August suggests that capital account outflows, which it estimated at a $144 billion in Q2, may have recently subsided and reversed. China's narrowing current account surplus and mixed capital inflows against the backdrop of slower economic growth suggest that the pace of CNY Real Effective Exchange Rate (REER) appreciation will be far slower than the 11% recorded in the past two years, it says. Still, it does not expect the REER to weaken on a trend basis, with the PBOC likely to favour a degree of CNY Nominal Effective Exchange Rate (NEER) appreciation to help dampen CPI-inflation.
Find us on Google+
No comments:
Post a Comment