VIEW: ING Wary Of Recent CNY Appreciation In Short-Term

ING go on to note that "exporters are now at a crossroads deciding whether to convert their dollar receipts to take profits on their appreciated yuan revenues, or to hold on for longer if the dollar is going to weaken further. But there are increasing warnings from the PBoC about yuan volatility that should not be ignored. We expect that if the yuan continues to appreciate after recent rounds of talking down the appreciation by the PBoC, the PBoC may more forcefully manage the yuan's path. We have to remember that the yuan exchange rate mechanism is a managed-float mechanism. It is legitimate for the PBoC to choose to stabilise the exchange rate if it thinks this could reduce financial risks. We keep our USD/CNY forecast at CNY6.30 by the end of 2021."