After a brief few hours of rallying overnight as early indications tilted towards Clinton, the moment Florida was called for Trump, China's offshore Yuan started to crash. Just hours later it has dropped 5 big figures to a record lows of over 6.82/$ despite China's officials preferring him.
The selling panic started as Trump took the blead in Florida and several other battleground states…
Which is a new record low for the offshore currency…
As Bloomberg reports, China’s Foreign Ministry said it looked forward to working with the new U.S. government to ensure a "sound and steady" development of bilateral ties…
"China-U.S. trade cooperation has benefited the U.S. people instead of hurting their interests," said Foreign Ministry spokesman Lu Kang at a briefing in Beijing on Wednesday before Trump’s victory was confirmed. "As for any issues between the two countries, we hope our relationship can be mutually beneficial."
Some analysts see a silver lining for China in a deterioration of the ties between the U.S. and the rest of the world, arguing that it may push other Asian economies to cosy up to their larger neighbor. Trump’s pledge to withdraw from President Barack Obama’s Trans-Pacific Partnership may benefit China, which was excluded from the free-trade agreement, according to Kevin Lai, chief economist for Asia excluding Japan at Daiwa Capital Markets in Hong Kong.
"Should the U.S. pull out, and the deal fall through, China would avoid the negative economic impact of being shut out of the massive trade deal," Lai wrote in a note Wednesday.
“A lot of U.S. presidential candidates had named China as a foe in their campaigns, but once they’re elected, they do business as usual," said Chris Leung, a senior economist at DBS Bank.
And as is clear, the pressure on outflows is building, as Onshore-Offshore spread is at 9 month highs…
USD is set to strengthen on faster pace of Fed hikes, and CNH will come under “heavier pressure” from fundamental perspective, according to Mizuho strategist Ken Cheung
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