HT up front for the headline: Rabobank's Michael Every a few years ago, loved but unlinked.
(I'll see if I can find it on the next trip to the link-vault)
Following up on April 11's "The Chinese Yuan is Flirting With a Breakdown":
Aren't we all.
But do stick around, you'll want to see how everything turns out.
From TradingView (up is weaker i.e. more Yuan to buy a dollar), April 11:
If it breaks through the current level (big if, it is the Bank of China that picks the level) a very fast 5% weakening, from 6.37 to 6.68 would be the target with a medium-term goal of 7.0 - 7.1.
And from Marc Chandler at Bannockburn Global Forex, April 24:
....Chinese Yuan: The dollar rose 2% against the Chinese yuan last week, the most since August 2015. The greenback gapped higher in the middle of the week, egged on by a sharply higher dollar fix by the PBOC. Last week, we warned of the risk into the CNY6.50-CNY6.60 but did not think it would be seen so quickly. The greenback's surge left it more than three standard deviations above the 20-day moving average. The pace of the move may be surprising for Chinese officials who may want to avoid a vicious cycle of the weaker exchange rate fueling capital outflows, sparking more currency weakness. Still, the divergence of monetary policy means that shadowing the dollar, like the PBOC, is not realistic or helpful. The jump in volatility and the surge in the put-call skew (25 delta risk-reversal) suggest the demand for dollar calls, which could be used to hedge Chinese exposure. The three-month implied vol rose from 3.9% at the end of the previous week to more than 5.3% now. The skew reached its higher level since the spike in March 2020. Reports suggest volume in the offshore yuan (CNH) and yuan options surged.
....MUCH MORE
And from TradingView, (USDCNY 6.5451):
