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A UBS foreign exchange strategist said China will keep losing capital and that the yuan will weaken further. He expects China's foreign exchange reserves to fall to $2.7-2.8 trillion by year-end.
Economists polled by Reuters had expected a January reserves drop of about $10.5 billion.
Capital outflows and reserve drawdowns signal continued pressure on the yuan, which tends to lift USD/CNY. A weaker yuan can reduce China's import demand for US and Brazilian feed commodities at the margin.
cnbc.comHuileng TanFeb 7, 2017After 398 past bullish macro events, Chinese Yuan (CNY per USD) moved a median +0.0% over 5 sessions (56% higher; middle half -0.3% to +0.5%), 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.
