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Commerzbank says China's corporate debt problem is adding volatility and vulnerability to the yuan. Chinese firms have increased offshore borrowing since 2016, which raises their exposure to currency risk and hedging demand.
The bank expects the PBoC to defend the 7.00 level into 2019 provided the trade conflict does not escalate.
Yuan weakness would make Chinese buyers of US soybeans and other farm goods less willing to buy, while a stable yuan supports import demand. The analysis is a currency outlook with limited direct price impact on feed commodities.
forexcrunch.comFX StreetDec 31, 2018After 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.
