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14 Aug 2015
USD/CNY: neutral bias between 6.3500-6.4500 - BTMU
FXStreet (Guatemala) - Analysts at the Bank of Tokyo-Mitsubishi UFJ, Ltd. explained they expect further dramas from the PBoC.
Key Quotes:
"We're probably too old now to believe the drama's truly over for RMB after the surprise fixing mechanism change / mini-deval. PBOC drew a line in the sand at 6.4500.
We are assuming it can defend this next week. If not, we would have probably penciled in not 6.5000, but something more like 6.8000 (the 10% deval Deputy PBOC Govenor Yi Gang told us is ridiculous), as we get back into the higher spot, higher fix game. We think it's fair to say PBOC has handled this in a pretty hamfisted way. We wish this was the only major policy episode this Year of Refinancing Dangerously for which we feel this way. It's not. Let's also call it the Year of Bumbling Dangerously."
Key Quotes:
"We're probably too old now to believe the drama's truly over for RMB after the surprise fixing mechanism change / mini-deval. PBOC drew a line in the sand at 6.4500.
We are assuming it can defend this next week. If not, we would have probably penciled in not 6.5000, but something more like 6.8000 (the 10% deval Deputy PBOC Govenor Yi Gang told us is ridiculous), as we get back into the higher spot, higher fix game. We think it's fair to say PBOC has handled this in a pretty hamfisted way. We wish this was the only major policy episode this Year of Refinancing Dangerously for which we feel this way. It's not. Let's also call it the Year of Bumbling Dangerously."