Posts tagged 'Dollars'

When break-even inflation expectations are falling…

George Saravelos at Deutsche Bank has looked at Eurozone inflation break-even rates and worries that the ECB may be losing control:

 Read more

China’s FX grip is not what it seems

The influence of the ‘China factor’ on currency markets is waning.

That at least is the view of HSBC’s FX strategy team, headed by David Bloom. Read more

The curious incident of the PBOC in the USDCNY market

Something’s afoot in the world of RMB.

The renminbi fell on Tuesday by the most in a single day since 2012, dropping 0.35 per cent against the dollar in the onshore market by midday in Shanghai, and 0.7 per cent since Wednesday, as the FT reported.

The market has put this down to an imminent change in China’s foreign exchange regime. The narrative is that the PBOC is preparing to widen the trading band ahead of flotation and is spooking the market intentionally, so that it realises that the RMB goes down as well as up, and that carry-trades are no free lunch.

Not everyone is as convinced. Read more

Time to rebuild dollar longs?

Here’s a chart that caught our eye on Wednesday morning (click to enlarge):

It comes via George Saravelos at Deutsche Bank and shows the surge in short-term flows. Read more

An unwind in the great Chinese over-invoicing carry-trade?

The popular explanation for the rise in Chinese repo rates is being linked to the government’s desire to rein in the shadow banking sector. That is to say the tightness is intentional.

But what if it isn’t. What if it has more to do with the unwind of yet another carry trade? Read more