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ANZ analysts said that stronger-than-expected yuan fixings after Moody's downgrade of China are unlikely to have much lasting effect. They noted that the onshore spot rate has traded weaker than the fix, a sign of strong dollar demand.
Persistent onshore dollar demand means the authorities may need to intervene in FX markets, which affects the currency backdrop for China's commodity imports. The price impact on feed commodities is minor.
octaafrica.netMay 24, 2017After 991 past macro events, Chinese Yuan (CNY per USD) moved a median -0.0% over 5 sessions (49% higher; middle half -0.3% to +0.3%), and -0.1% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Stronger-than-expected yuan fixings after the Moody's downgrade signaled official support for the currency, which contributed to the yuan strengthening, though ANZ doubted the effect would last.
