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RMB expected to strengthen in the near term - ANZ

FXStreet (Łódź) - Irene Cheung, FX Strategist at ANZ remarks that the RMB should continue rising in the nearest future, on teh back of large trade surplus numbers and upcoming macro events.

Key Quotes

"In the near term, we remain constructive on the RMB given the large trade surplus and more importantly, key events in the coming fortnight (APEC meeting in Beijing starting this Friday and G20 leaders’ meeting in Brisbane on 15-16 November)."

"JPY depreciation could however impact China’s export competitiveness over the longer term, directly as well as indirectly. This has put downward pressure on other Asian currencies (notably the KRW) and the EUR from an export competitiveness perspective. Both the nominal and real effective exchange rates of the RMB are now at or close to record highs."

"Whether exports become less competitive will depend on the extent of further JPY weakness, the pace of China’s capital account liberalization (both directions), as well as the timing of China’s ascent into a reserve currency."

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