Senin, 30 Mei 2016

Daily Business Report

Daily Business Report

China Sends Yellen Another Warning, Fixes Yuan At Lowest In Over Five years

Posted: 30 May 2016 06:44 AM PDT

We got an early hint of what the PBOC would do tonight on Friday and Saturday, when as we reported, an unprecedented volume burst of bitcoin buying out of China, sent the digital currency soaring to the highest level since 2014.

To be sure, we had expected sailing would not be smooth for the FX market, when on Friday afternoon, after Yellen's' unexpectedly hawkish comments at Harvard, which sent the USD surging, we predicted a stormy sea for the Monday Yuan fix:

That is precisely what happened when moments ago the PBOC set the official exchange rate of the onshore Yuan lower by nearly 0.5%, from 6.5490 to 6.5794, the lowest fixing in more than 5 years, or February 2011.

Which brings us to a post we wrote last Wednesday, when according to Daiwa, "Round Two Of China Capital Outflows Is About To Begin." The highlights:

For the answer keep an eye on the offshore Yuan: if the selling and shorting resumes in earnest without an intervention by the PBOC, the events from August and January are about to deja vu themselves, all over again.

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