While the Renminbi basket (Chinese currency basket relative to biggest world trade partners’ currencies) has been ‘stable’ for almost 5 months, the catchdown in the Yuan’s purchasing power against the US Dollar is accelerating rapidly. Busting through 6.90/$ in early Asian trading, the last time offshore Yuan cratered this quickly, stocks plunged in January. The question is – how much further can the Yuan fall before the Trump bump gets damaged?
Judging by the transition to weakness against the Dollar… 6.90 may be nothing as 7.20 looks likely…
Notice how the PBOC rotates between USD-prone moves and non-USD-prone.
Luckily – this time is different…