FXStreet (Bali) – Brian Daingerfield, FX Trading Strategist at RBS, notes that a further softening in Chinese data today could increase capital outflows and put downward pressure on the renminbi.
Key Quotes
“After poor export data for July released over the weekend and the change to China’s FX policy overnight, China releases July retail sales and indutrial production overnight.”
“China’s changing FX regime has been described by officials as a once in a decade shift and PBOC officials have pledged stability in the currency after today’s decision.”
“But there is still significant uncertainty on just how forcefully Chinese officials will intervene in the near-term to prevent a further decline in the renminbi, even though the fix is now more closely linked to market forces.”
“Further softening in domestic data released today could increase capital outflows and put downward pressure on the renminbi, but we think at least initially Chinese officials will be active in preventing a destabilizing decline in its FX rate.”
(Market News Provided by FXstreet)