20 Mar 2015
Short USD/CNH to take advantage of RMB stability - ANZ
FXStreet (Barcelona) -With markets unwinding their expectations for RMB depreciation, Khoon Goh, Senior FX Strategist at ANZ, suggests a strategy to take advantage of RMB stability.
Key Quotes
“The market has finally unwound their expectations for band widening and significant depreciation of the RMB.”
“With exporters under-hedged and importers over-covered, we could see further onshore CNY demand in the near-term.”
“However, this does not mean that we will see a return of one-way appreciation. If anything, there will be increased two-way volatility, and ongoing onshore corporate hedging demand will prevent RMB from gaining too much.”
“We maintain our short USD/CNH forward, CNH/NDF convergence, and USD/CNY NDF put positions. We see selling USD/CNY NDFs as the best way to take advantage of RMB stability.”
Key Quotes
“The market has finally unwound their expectations for band widening and significant depreciation of the RMB.”
“With exporters under-hedged and importers over-covered, we could see further onshore CNY demand in the near-term.”
“However, this does not mean that we will see a return of one-way appreciation. If anything, there will be increased two-way volatility, and ongoing onshore corporate hedging demand will prevent RMB from gaining too much.”
“We maintain our short USD/CNH forward, CNH/NDF convergence, and USD/CNY NDF put positions. We see selling USD/CNY NDFs as the best way to take advantage of RMB stability.”