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An Amundi strategist argues that China faces a difficult task stabilising the renminbi after offshore volatility surged at the start of 2017. A liquidity drought lifted the HIBOR overnight rate to 61 percent, forcing short CNH positions to unwind.
Authorities have built a firewall against further volatility.
Persistent renminbi pressure and capital outflows keep China's currency risk elevated, which can affect the economics of dollar-priced feed imports.
scmp.comAidan YaoJan 18, 2017After 169 past neutral macro events, Chinese Yuan (CNY per USD) moved a median +0.0% over 5 sessions (50% higher; middle half -0.3% to +0.2%), and -0.0% 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.
HIBOR overnight rates spiking to 61% forced unwinding of short CNH positions, supporting the yuan.
