USD/CNY NDFs fall sharply, with 1-year NDF at 6.4280/6.4330 (lowest since end April) vs 6.4400/6.4480 yesterday, despite higher USD/CNY in spot market, as traders expect Beijing to continue combat inflationary pressure via stronger CNY, says Hong Kong-based trader at European bank. "The slowdown in first-half GDP growth is within expectation, but with price pressure remaining and the PBOC's reluctance to hike interest rates, we think the government will mostly use the currency as a tool to curb inflation." 1-Year NDF tipped to test 6.40 in near term, he adds.
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