Amy Yuan Zhuang, Research Analyst at Nordea Markets, notes that China’s trade war with the US and currency fight has begun and due to capital flight concerns, the PBoC will defend the CNY against too deep weakening. Key Quotes “The trade war has limited initial growth impact but implies tense long-term relationship with the US.” “The extensive CNY weakness against both the USD and the currency basket caught the market off guard. The weakness is overdone, but correction might not happen until the end of this year.” “The elevated near-term risk surrounding the trade war will likely keep depreciation pressure on the CNY in the coming 3-6 months. However, USD/CNY faces limited upside as the PBoC will likely defend the level of 6.70 to avoid capital flight.” “Trade war with the US officially begins on 6 July, when the two countries levy 25% tariff on USD 34bn of imports from each other.” “The announced trade measures are estimated to have limited growth impact. But the trade war is really the beginning of long-term rivalry for global supremacy. The relationship between China and the US will likely remain tense regardless of the outcome of the trade war.” “China’s domestic economy is still expanding, but we expect the uncertain export outlook and government efforts in deleveraging and cooling down the housing sector to drag down H2 growth this year.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Forex Today: US-China trade war begins, all eyes on China’s retaliation, US NFP FX Street 3 years Amy Yuan Zhuang, Research Analyst at Nordea Markets, notes that China's trade war with the US and currency fight has begun and due to capital flight concerns, the PBoC will defend the CNY against too deep weakening. Key Quotes "The trade war has limited initial growth impact but implies tense long-term relationship with the US." "The extensive CNY weakness against both the USD and the currency basket caught the market off guard. The weakness is overdone, but correction might not happen until the end of this year." "The elevated near-term risk surrounding the trade war will likely keep depreciation pressure… Top Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.
