18 Feb 2015
RMB could depreciate further – JP Morgan
FXStreet (Edinburgh) - In the view of analysts at JP Morgan, the RMB could still be pushed against the upper end of the trading band in the near term.
Key Quotes
“RMB spot depreciation pressure against the band ceiling will persist. Broad dollar strength, perceived elevated risk of policy depreciation, and ongoing corporate hedging will keep RMB depreciation pressure elevated for the foreseeable future”.
“Further RMB weakness is dependent on a PBoC FX policy shift”.
“We believe there is a 75% probability that PBoC will allow further RMB weakness in the near-term. This will probably be via a gradual weakening of the RMB trading band at around a 2-3% pace, but a band widening is also possible later this year”.
Key Quotes
“RMB spot depreciation pressure against the band ceiling will persist. Broad dollar strength, perceived elevated risk of policy depreciation, and ongoing corporate hedging will keep RMB depreciation pressure elevated for the foreseeable future”.
“Further RMB weakness is dependent on a PBoC FX policy shift”.
“We believe there is a 75% probability that PBoC will allow further RMB weakness in the near-term. This will probably be via a gradual weakening of the RMB trading band at around a 2-3% pace, but a band widening is also possible later this year”.