DislikedSisse or anyone. I read around that China is doing devaluation of Yuan . But short term the effect is opposite ( They sell their FX reserves to try to support and strengthen the Yuan and most of their fx reserves is in USD causing some of the moves we see, they sell big USD and buy Yuan ) Yuan has strengthened strongly this week. And when they have burned their reserves we will see the reel effect from the devaluation. Not sure I am on the right track here so anyone having opinion about this would be nice to hear. Also Mexico selling off USD to...Ignored
EMs now short term and mid term unlocking another strike on higher levels USD/EM, especially tracking ZAR CNH/Y BRL and TRY. 8100 is first one on ZAR without LL invalidation should be main play.
China has a lot of fuel to burn in FX, Tbill, short liquidity reserves and since their politics is very centralized they can come out with some quick bangs (already did some) to really make some impacts on CNH and scare shorts on near term, however they are heavy exporting economy and markets wouldnt appretiate large volatility in currency especially on bull side. On very large macro China is trapped no question about it, but from traders point of view mid term can still be very rocky. Lets not forget when in 2015 first phase begin they rolled some heads, prisoned heavy shorters, and rolled some tanks, thats how they roll, dont underestimate what can be behind the corner for CNH shorts.
On side note to prove above point, just in last 2 days Bitcoin in China crashed 30%, altough tiny currency it points out what strongly centralized policy can impact on assets just with few comments.
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