FX FUNDAMENTAL ANALYSIS
stronger. The FED in their earlier warnings about raising rates three times in 2017
also added pressure
to the RMB to soften relative
Februar y to USD, although
President Trump labeled China as “grand champions” of currency manipulation on
Chinese expor ts cheaper and taking
23rd, making away American
Chart 1 - USD/CNH Monthly
manufacturing jobs. This may come close to clarity again on 15th April 2017 in the Treasury Currency Report as mentioned by US Treasury Secretary Mnuchin. A senior official from China’s Deputy International Trade Representative
explained
that China has made progress in its market oriented reforms of exchange rate system, and the US Treasury Department remarked in its 15th October 2016 report that China does not meet requirements of manipulating their currency, but are progressing to reduce current account surplus to GDP ratio.
China’s central bank has spent more than $570 billion wor th of assets
foreign exchange to prop up the yuan Chart 2 - AUD/NZD Monthly
to counter capital outflows. The International Monetary Fund (IMF) mentioned last
46 FX TRADER MAGAZINE April - June 2017
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