Surprise RMB strengthening prompts unwinds

“A lot of long [US$] positions were unsustainable and had to be re-evaluated,” says forex structuring head

dollar-rmb unwinds
US dollar-offshore renminbi rate fell from 6.87 on May 23 to a low of 6.72 on June 1

A surprise move by China’s central bank to step in and strengthen the local currency has left currency speculators scrambling to unwind their long US dollar positions, and prompted renewed appetite for hedging among the country’s onshore exporters, who previously chose not to protect themselves against a weaker dollar.

The US dollar-offshore renminbi (CNH) rate fell from 6.87 on May 23 to a low of 6.72 on June 1, following Moody’s decision to cut the country’s credit rating. This led to a surge

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: