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EM and commodity currencies on a high, supported by stable CNY bets - NAB

FXStreet (Delhi) – Research Team at NAB, suggest that the rapid reversal in post-August 11 Emerging Market and commodity currency weakness continued with a vengeance overnight, supported by the bets that China will keep its currency stable.

Key Quotes

“The Malaysian Ringgit is 3.6% up on this time yesterday and the Indonesian Rupiah 3% higher. At 0.7211, AUD/USD is now 4.1% above its recent (Sep 24) lows, and NZD at 0.6612 some 6% higher over the same period. Our FX Strategy team decided to run for cover last night and exited a short NZD trade recommendation from 21 July at break-even.”

“Much of this rally is predicated on a view that China will now maintain a relatively stable CNY through the rest of this year at least and following strong verbal commitments by President Xi during his recent U.S. visit. And, we’d also note, ahead of a likely IMF decision on China SDR inclusion (likely next month).”

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EM and commodity currencies on a high, supported by stable CNY bets - NAB

Research Team at NAB, suggest that the rapid reversal in post-August 11 Emerging Market and commodity currency weakness continued with a vengeance overnight, supported by the bets that China will keep its currency stable.
Read more Next
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