Volatility defence: the PBoC plans to introduce a “countercyclical adjustment factor” to the pricing mechanism of the USD/CNY fixing
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Recent market intervention from China’s central bank to prop the yuan higher is unsustainable in the medium term as the US dollar is set for a comeback, says Sean Callow, a senior currency strategist at Westpac.
“The recent engineered yuan surge and brutal money-market squeeze cannot be sustained. While it lowers trading ranges on USD/CNY for the coming weeks, it is highly unlikely to impact the multi-month trend towards a stronger dollar,” he says.
“It is hard