The Dollar May Be At An Inflection Point

Chinese Yuan.  The yuan rose for the first time against the dollar in seven weeks.  It has completely unwound its earlier gains and is now off about 0.4% for the year.  More trackers of flows into different funds are seeing outflows from Chinese bonds.  The yuan's weakness seems to be fundamentally driven, and the PBOC is not leaning hard against it.  Last week, the dollar traded inside the previous week's range (~CNY6.54-CNY6.58) (CYB).  The offshore yuan is a little softer than the onshore yuan, which is understood as offering insight into the direction of the underlying pressures. Beijing is expected to report lending figures, trade, investment, retail sales, and industrial production figures for March, culminating in the first look at Q1 GDP.  The economy has lost some of its mojo, and the median forecast in Bloomberg's survey projects that growth nearly halved from the Q4 20 pace (2.6%) to around 1.4%.  

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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