China: Yuan depreciation coming – SocGen

FXStreet (Delhi) – Societe Generale EM strategists expect a gradual and controlled move higher in the USD-CNY to 6.80 by end-2016.

Key Quotes

“A larger move is possible if regional currencies depreciate more than the RMB and the associated trade-weighted appreciation proves too much for policymakers to bear relative to growth/employment objectives. But, beware PBoC intervention, if long USD-CNH positioning becomes stretched: see Asia Strategizer.”

“Following an IMF staff report recommending inclusion of the RMB in SDR, the inclusion is expected to be confirmed today.”