search.noResults

search.searching

dataCollection.invalidEmail
note.createNoteMessage

search.noResults

search.searching

orderForm.title

orderForm.productCode
orderForm.description
orderForm.quantity
orderForm.itemPrice
orderForm.price
orderForm.totalPrice
orderForm.deliveryDetails.billingAddress
orderForm.deliveryDetails.deliveryAddress
orderForm.noItems
FX FUNDAMENTAL ANALYSIS


“Yet contrary to the oft-voiced complaints by President Donald Trump, Beijing has taken active steps to boost the value of its currency, ... not to lower it,” Randall W. Forsyth said. While China arguably manages the yuan’s value to


e c o n o m i c stability,


maintain its


options may be limited if d o w n w a r d pressures persist.


“ C o u n t e r- cyclical” support is unlikely to continue for long before leading to losses in China’s foreign exchange reserves. country’s


forex


reserves stood at U.S. $3.11 trillion August


in after


declining by $8.2 billion from a month before and barely rising by $5.8 billion in July and $1.5 billion in June. An increase in interest rates to ease pressure on the currency is unappealing due to the effects on economic growth, which slipped to 6.7 percent in the second quarter from 6.9 percent last year.


China’s government may be hoping that time will bring a resolution to the tariff conflict before it has to choose between unpleasant options. The last bout of “counter-cyclical”


44 FX TRADER MAGAZINE October - December 2018 Harsh assessments


A more permanent measure to manage depreciation pressures might be a further tightening of capital controls. But the choice could draw fire


from the International


Monetary Fund, which reluctantly included the yuan in its Special Drawing Rights (SDR) basket of “freely traded” currencies in 2016. Since then, China has tightened rather than loosened controls to curb outflows, notably with a crackdown on overseas investment last year.


intervention lasted a little more than six months. “The currency’s depreciation pressure is expected to ease in the near term,” the official English-language China Daily said, citing unnamed analysts.


China’s lack of progress on forex reforms has led to some harsh assessments of


the


IMF decision


and China’s currency policies. “The IMF either knew or should have known that the RMB is not a true currency, but rather a derivative of the


dollar,


and pretended it was a true currency anyway to placate the C hin e s e , ” Scissors said.


Recently, China’s r e g u l a t o r s renewed their pledge


to gradually The


The “counter-cyclical” policy may validate currency manipulation claims


lift


capital controls without giving a time frame. “The country will make the yuan convertible


under the capital account in an orderly manner, and protect the interests of foreign investors,” the State Administration


of Foreign


Exchange (SAFE) said on Aug. 2 in a statement before the reserve requirement and “counter-cyclical” moves were announced. SAFE said it would “continue to reform its forex management in the latter half of 2018,” according to Xinhua.


Michael Lelyveld


Analyst and journalist RFA


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62