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Iris Pang, Economist at ING, notes that China’s foreign exchange reserves fell to $3.053 trillion from $3.087 trillion in October.

Key Quotes

“This implies that there is no capital outflow panic in China even as USD/CNY approached 7.0, and depreciated 1.56% in the month. The yuan’s weakest closing level against the dollar was 6.9757 on 31 October.”

“The data confirms our view that the USD/CNY 7.0 handle is a mere round number, not a psychological barrier, as the currency pair has approached this level a number of times.”

“We expect that USD/CNY and USD/CNH will cross 7.0 anytime between now and the end of 2018.”

“We expect USD/CNY and USD/CNH to reach 7.3 by the end of 2019.”