China: March Foreign Reserves Data Preview – ING
Tim Condon, Chief Economist at ING, suggests that based on stable CNY
policy and ING’s house view that USD/Majors will range trade in 2016
they revised their yearend USDCNY forecast to 6.47 from 6.65.
Key Quotes
“March
foreign reserves data is due tomorrow. The consensus forecast is $3.196
trillion, which would be a negligible $6.3 billion decline from
February. We credit the PBOC’s USDCNY fixing policy, which Governor Zhou
characterizes as enhanced reference to a basket of currencies, and the
tightening of exchange controls/macropru for slowing reserve outflows
from the unsustainable $100 billion per month pace of November- January.
We think there are strong economic and political reasons for the PBOC
to stay the course.
Based on this and ING’s house view that
USD/Majors will range trade in 2016 we revised our yearend USDCNY
forecast to 6.47 from 6.65 (latest 6.48, Bloomberg median 6.70, forward
6.62).”
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