Free Trial
JGB TECHS

(U2) Off Lows, But Still Fragile

AUSSIE BONDS

Another Round Of Richening

AUSSIE 10-YEAR TECHS

(U2) More Stable But Still Fragile

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

Further CNY Depreciation Weighs On EM FX

EM FX
  • The sharp depreciation in the Chinese Yuan in the past two week has been weighing on all EM currencies.
  • USDCNYbroke above the 6.60 resistance earlier and is up nearly 4% since the start of its rally last week.
  • The chart below shows that all EM currencies are down against the USD in the second half of April (excluding RUB).
  • Risk on’ ZAR is the worst performing currency,down nearly 9% against the US Dollar.
    • We previously saw the CNY weakness has been the major driver of ZAR lately (correlation between CNY and ZAR surges when implied vol on CNY spikes).
  • We have also seen a significant reversal in Latam currencies in the past two week (BRL and COP), which were the strongest performers in Q1, driven by elevated nominal yields and aggressive tightening run by local central banks.
  • COP is the second weakest performing currency among the EM world (-6.7%), shortly followed by BRL (-6.2%).

Source: Bloomberg

167 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.
  • The sharp depreciation in the Chinese Yuan in the past two week has been weighing on all EM currencies.
  • USDCNYbroke above the 6.60 resistance earlier and is up nearly 4% since the start of its rally last week.
  • The chart below shows that all EM currencies are down against the USD in the second half of April (excluding RUB).
  • Risk on’ ZAR is the worst performing currency,down nearly 9% against the US Dollar.
    • We previously saw the CNY weakness has been the major driver of ZAR lately (correlation between CNY and ZAR surges when implied vol on CNY spikes).
  • We have also seen a significant reversal in Latam currencies in the past two week (BRL and COP), which were the strongest performers in Q1, driven by elevated nominal yields and aggressive tightening run by local central banks.
  • COP is the second weakest performing currency among the EM world (-6.7%), shortly followed by BRL (-6.2%).

Source: Bloomberg