FX Week China: CNH/CNY forward divergence threat has stabilised
A reversal of the spread between offshore deliverable forwards and onshore NDFs that caused pain for speculators last year is unlikely to recur, say economists
A painful divergence between onshore renminbi (CNY) and offshore renminbi (CNH) forward rates last year that is believed to have left speculators nursing heavy losses is now less likely to recur in future, according to speakers at the FX Week China event in Shanghai earlier this week.
The problem occurred in September 2011, when investors that had bet on the popular spread between the new USD/CNH deliverable forwards and the more established USD/CNY non-deliverable forwards were caught out by a
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