USD/CNY: Pretty comfortable where they are – MUFG

Lee Hardman, Currency Analyst at MUFG, suggests that despite being a generally down week for the big USD, CNY resumed weakening vs CFETS.

Key Quotes

“Chinese names seen on the offer in DF to narrow the on/offshore DF differential are behaving consistently with SDR window dressing before entry day (1 October); offshore implied interest rates, if anything, may have dropped a bit too much. Consensus sees no firming of China trade flows for now and a further headline deceleration of CPI inflation will increase pressures on PBOC to cut. Consensus also seems to be looking for a trend slowdown in bank lending, which will add to the pressure.”