USD/CNY: Continued yuan weakness as market look through the export boom – Commerzbank

The renminbi is getting weaker and weaker. In the opinion of economists at Commerzbank, it is time to ask how much of the past CNY strength is justified medium to long-term.

Everyone seems to have overcome the pandemic now, except for China

“It does seem surprising that everyone seems to have overcome the pandemic now, except for China. I leave it to the China experts to judge whether this is due to the inability of Chinese public health policy, political stubbornness which prevents the use of effective vaccines, or whether Chinese politicians are quite happy to create social stress which seems to justify the use of interventions on an unprecedented scale.”

“The only thing that is relevant from the FX market’s point of view is: it is high time to look through the export boom that caused CNY strength in the past and to ask how much of the past CNY strength is justified medium to long-term. The fact that this different approach has come so suddenly does not exactly say much about the far-sightedness of the FX market. But better late than never…”