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Benjamin Fuchs of BFAM Partners said Chinese authorities had taken steps in the past week to support the yuan, including asking state-owned enterprises to sell foreign currency. He warned that repeated capital controls could erode confidence and that the dollar's rise against the yen adds pressure on China to let the yuan depreciate.
Tighter capital controls and mounting depreciation pressure raise the risk of a sharp yuan decline, which would lift dollar costs for Chinese feed importers. The episode shows how currency policy can shift the price of dollar-denominated commodities.
gulf-times.comBloomberg/Hong KongJan 8, 2017After 31 past bullish policy events, USDCNY moved a median -0.2% over 5 sessions (42% higher; middle half -0.4% to +0.3%), and -0.1% over 20.
After 15 past bullish policy events, DXY moved a median +0.2% over 5 sessions (53% higher; middle half -0.4% to +0.4%), and +1.0% 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.
