CNY: Further depreciation ahead - ANZ

Analysts at ANZ note that the CNY fell to its weakest level against the USD since 2008 and capital outflow pressure looks set to continuing weighing on the currency in 2017.

Key Quotes

“The authorities are more tolerant of CNY weakness, though they are seeking to maintain stability in the RMB Index.”

“However, the RMB REER is still at elevated levels. This suggests scope for more downside, which implies the RMB Index will eventually move lower. We forecast USD/CNY to end 2017 at 7.10.”