Risks of near-term RMB depreciation are building - Nomura

Dollar outperformance continued this week, with particular attention on a further move higher in USD/CNH, notes the research team at Nomura.

Key Quotes

“With Chinese authorities seemingly allowing for more market determination/flexibility in setting the RMB exchange rate against a backdrop of worsening US-led trade protectionism, a further weakening of local macro conditions and an expansionary domestic monetary policy, our Asia FX strategy team believes that risks of near-term RMB depreciation are building and added to existing long USD/CNH positions.”