USD/CNY likely to remain two-way - Westpac

USD/CNY has been more two-way since the Aug 8-10 slide and is likely to remain that way after Jackson Hole so long as Fed officials strike at least a moderately upbeat tone, according to Sean Callow, Research Analyst at Westpac.

Key Quotes

“Overall the clear downtrend from 6.90 in May seems set to extend beyond the recent stabilization around 6.65.”

“A firm yuan remains a policy priority and the US dollar probably won’t make substantial gains until say Nov-Dec, on the assumption of a government funding and debt ceiling deal, then a Dec FOMC rate hike. The 12mth NDF at 6.80 reflects the market view into 2018 – the dollar finds support eventually.”