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8 Mar 2013
Forex Flash: USD/CNY holds bullish bias ahead - BTMU
Bank of Tokyo Mitsubishi UFJ analysts feel that USD/CNY holds a bullish bias and looks set to move between a range of 6.2400 and 6.2185.
The writes, “To be direct, we're a little cautious about a strong US NFP print pushing all of USD/Asia higher in the coming week, including USD/CNY. Our 2013 views haven't changed at all and we still expect the renminbi to appreciate over the course of the year, but this may be a contrapuntal week.” They add that a high-ish Chinese CPI print (anything with a 3-handle) over the weekend may spark apprehension of escalating monetary tightening and selloff in risky assets. Further, oiler demand may also be due, even if it remains NPC week. But as long as PBOC remains in step and not behind in its anti-inflation fight, they think rising interest rates in China eventually will be correlated with a stronger currency (as typical).
The writes, “To be direct, we're a little cautious about a strong US NFP print pushing all of USD/Asia higher in the coming week, including USD/CNY. Our 2013 views haven't changed at all and we still expect the renminbi to appreciate over the course of the year, but this may be a contrapuntal week.” They add that a high-ish Chinese CPI print (anything with a 3-handle) over the weekend may spark apprehension of escalating monetary tightening and selloff in risky assets. Further, oiler demand may also be due, even if it remains NPC week. But as long as PBOC remains in step and not behind in its anti-inflation fight, they think rising interest rates in China eventually will be correlated with a stronger currency (as typical).