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The yuan fell 4% in April, its steepest monthly drop since the 1994 foreign exchange reforms. The slide is being driven by portfolio outflows, a strengthening US dollar and a weak domestic economic outlook.
A weaker yuan raises China's import costs for feed inputs priced in dollars and can soften Chinese demand for US and Brazilian feed commodities, which is bearish for those price levels.
reuters.comMay 6, 2022After 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.
Corporate hedging spikes and portfolio outflows on May 6 reinforced yuan depreciation momentum during the window.
Record monthly yuan drop in April, portfolio outflows and corporate hedging demand for dollars indicate persistent depreciation pressure that carried into the May 12 move.
Documents the momentum behind the yuan's April slide (portfolio outflows, strong dollar, corporate hedging demand), a backdrop that likely carried into the May 9 drop.
