Quotes from Danske Bank:
-CNY has depreciated recently on the back of substantial capital outflows from China and USD/CNY trading at its ceiling in the daily trading band. In light of this we have revised our forecast for USD/CNY higher, but we still expect CNY to appreciate moderately within the daily trading band.
-1) In our view the PBoC is not targeting a substantially weaker CNY to support growth and is signalling that by intervening in the FX market and maintaining the daily trading broadly unchanged. 2) China's capital account is relatively closed, so negative impact from capital outflows should be temporary 3) China's trade balance surplus is increasing markedly on the back of lower commodity prices and resilient exports.
