Chinese yuan (USD/CNY)

Be patient. They will intervene now but go short but you must wait. Currency may gain a bit these few days but the long term trend for this year is still down.

Here is my play:
On margin you can trade 200:1 with currencies

To avoid losses as the currency tanks use only $500 out of every $10,000 deposited for each trade so you can withstand a 10% currency move in the opposite direction which is pretty much impossible if you ask me with the Yuan. $50K deposit with $2500 trade allows you to trade $500K and 5% depreciation on that is $25K which is 50% on your investment which is also not bad. If we are lucky this year we will see a 10% depreciation which will mean you make $50K on $50K bet and if not then $25K is good enough. I believe that the Chinese Yuan and HKD will come to being even or close to even this year and if not this year then next year.

Yuan would need to go from around 6.60 to 6.0 in order for you to lose all your money which in my opinion is worth the bet because the odds are pretty low that this will happen. Economy is not great in China r abroad. Exports are down so currency will depreciate in China.

Intervening still continues

I would wait before opening a new position to short Yuan unless you are long for 6-12 months then you should not worry about the possible 1-4% gains in the short term.

source: http://www.forexfactory.com/showthre...96#post8682196


China has opened a new front in its war to curb currency depreciation by buying up renminbi offshore, foiling the burgeoning carry trade and driving the cost of borrowing to a record high.
The elevated overnight CNH Hong Kong Interbank Offer Rate (Hibor) shows how volatility in China’s currency — once a highly domestic side-show for global investors — is fanning across the globe through renminbi internationalisation. Hong Kong, the biggest offshore market, bears the brunt.

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It is also a potent sign of the lengths to which China's central bank is prepared to go to support the value of offshore renminbi, known as CNH.
The overnight CNH Hibor, a daily benchmark for offshore renminbi interbank lending, hit a record-high 13.4 per cent on Monday, up from 4 per cent on Friday and the highest level since the benchmark was launched in 2013. The one-week rate surged from 7.1 per cent to 11.2 per cent.
The People’s Bank of China, acting through state-owned banks in Hong Kong, is buying up renminbi to curb CNH weakness and narrow the gap between CNH and onshore renminbi, known as CNY, analysts say.
The PBoC holds onto its purchases of CNH, thus depleting the supply of CNH available for interbank lending.
By buying CNH the PBoC also frustrates the short-term carry trade designed to profit from weakening renminbi. That trade involves borrowing CNH, exchanging the loan proceeds for foreign currency, then repaying the loan once the renminbi has fallen.
“It looks like PBoC wants to maintain a high cost of shorting CNH,” said Zhou Hao, Asia economist at Commerzbank in Singapore.
“On the other hand, it also shows that positioning is quite crowded — everyone borrows CNH to short — which means that a short covering could be very wild if it takes place.”
Renminbi deposits in Hong Kong totalled Rmb864bn ($130bn) at the end of November, a small fraction of the US dollars available to the PBoC for intervention from its $3.33tn stock of foreign exchange reserves. That means that relatively small interventions in the offshore market can have a major impact on CNH exchange and interest rates.
Longer-term factors are also contributing to the Hibor spike. CNH deposits have fallen for four straight months, with the decline beginning in August, after the PBoC shocked global markets by loosening its control of the currency, allowing it to depreciate.
As expectations of renminbi weakness built, foreign importers were keen to offload unwanted renminbi onto their Chinese suppliers through trade settlement. That led to a flow of CNH back onto the mainland, reducing liquidity.
An uptick in Chinese government bond issuance in the offshore “dim sum” bond market, as well as increased sales of CNH certificates of deposit by Hong Kong banks, have also strained the supply of CNH in recent months.
While CNH Hibor’s better-known US-dollar counterpart, Libor, is a crucial benchmark for loans dictating rates on trillions of dollars in funding each day, in CNH Hibor has little practical impact. Hong Kong banks do not depend on CNH Hibor-linked loans for funding.

Thanks for sharing.. I still reckon Yuan will tank this year. All other Asian currencies have already depreciated against USD except for Chinese Yuan. There might be a short squeeze up to squeeze out shorts but the depreciation will continue I reckon due to my trade experience out of China. Export numbers are down and manufactures sales numbers are down. Many are down 40-50% this year in sales.

I cleared the orders with USDCNH, and waiting for a better position to long USD again, When they down the middle price

With oil forecast to drop along with a strong Dollar. The Yuan should drop but one needs to be patient. Will not happen overnight.
http://www.bloomberg.com/news/articl...=yhoo.headline

CNH rolls surge as China gets more aggressive in deterring speculation

DailyFX quantitative strategist David Rodriguez sent me the following alert this morning:

"overnight rollover charges in the USD/CNH have surged as the PBOC has unofficially made it substantially more expensive to hold CNH-short positions. This is consistent with their preference to defend the CNH against speculation, and theres no question that theyre feeling the heat on the surge in the CNH vs CNY spread. (more on that here)"


Image source: Bloomberg

For people wanting to enter new positions it is best to wait a few days and then when things settle down short. Chinese New Years is coming up very soon so right before Chinese New Years the Government may prop up the currency a bit and then right after Chinese New Years the tanking will resume. One needs patience with this one. Actually everything with the Chinese requires patience lol..
Chinese can't be too happy about the weak Yuan news being out so they will do their best to deter their Billion Plus people along with overseas speculators from all jumping on the short ship but in the end there is not much that can be done about this. Short term yes but long term I doubt it. Wait and see...

I reckon that this means neither market or Yuan hit bottom yet..
http://www.reuters.com/article/us-ch...0UP23H20160112

This is most likely just to scare people and deter outsiders from shorting. At the same time he has to say this to keep locals at home in China from wanting to send their money abroad or change their money to USD.
http://qz.com/592015/betting-big-aga...ill-crush-you/

Any FXCM USDCNH traders here? Yesterday the offshore HIBOR was 66.8%, then early this AM it was back to a more reasonable 8.3%. https://www.tma.org.hk/en_market_more_ib.aspx This morning FXCM had the rollovers at ~ -156 for long (eep!) and +33 for short. It was stacking up as a very juicy short rollover. But then about an hour or two ago FXCM slashed the rollovers to ~ -42, +2. That's a greater than 20:1 ratio for rollover charges versus credits? -42 on a triple rollover Wednesday is still a stiff penalty for the longs, but +2 is neglible for the shorts. (I wonder if FXCM got caught with pants down like they did with the SNB event.)
As 5PM approaches the longs are still going to want to get out of the way of that triple rollover so I expect a slide until then with widening spreads.

Hi Honkskillet,

I noticed you just joined the forum, so welcome!

FXCM's rollover interest rates are a reflection of what we receive from our liquidity providers. In regards to USD/CNH specifically, the rollover rates have been impacted by actions taken by the PBOC which I highlighted in this earlier post: http://www.forexfactory.com/showthre...53#post8683753

For more background, you might be interested in reading this article in the Financial Times:
"China opens new front in war on speculators - PBoC intervenes in offshore renminbi market, sending HK rates to record" http://www.ft.com/intl/cms/s/0/af024...#axzz3x9YfzJiX

Heads up. Quad 4x rollover in 20 minutes.

7 this year should be a guaranteed slam dunk. Anything over 7 will be a bonus. Easy money shorting this one. Mark my post!

Back down we head. Don't buy into media propaganda moves that Yuan will be steady. http://www.reuters.com/article/us-ch...0US07P20160114

Short and be patient. It will pay off.
http://www.businessinsider.com.au/cr...se-data-2016-1

Rising Chinese Property Prices Hint PBOC Stimulus Working


Complete analysis by Bradley A. Kearns in his article on DailyFX.com

Russian Ruble at an all time low against the USD. Yuan will fall next.
http://uatoday.tv/business/russian-r...ar-574042.html

Index and Yuan should both drop another 10-15% from here this year.
http://www.bloomberg.com/news/articl...ort-or-get-out