Fire Up the Yuan Shorts: South Korean Won to Be Added to Yuan Basket?

More than three months before the release of CFETS RMB exchange rate index is not the currency of some of China's major trading partners included. Barclays expects the won is expected in June this year to become the basket of currencies in the fourteenth. Analysis of the bank's view that the won is added at the same time boost the index, it might give the yuan against the dollar to bring greater pressure to devalue.

Summary Bloomberg data show that the third quarter of 2015 in accordance with the sort of Chinese total trade top ten trading partners, currency Korea, Vietnam, Brazil and Mexico are not included in these four countries CFETS RMB exchange rate index. South Korea ranked fourth in the top ten trading partners after the United States, Japan and Hong Kong. BIS RMB exchange rate index currency basket will include the won, which ranked fourth in weight, 8.5%.

"Even according to the official definition, sample weight calculation considering currency re factors, the won should not be no place," Asia-Pacific fixed income at Barclays in Singapore, foreign exchange and commodities research director David Fernandez and his team on Tuesday to clients he wrote. He expects the won to bring substantial change in the inclusion of the RMB exchange rate index for the CFETS, but also to move towards greater depreciation of the yuan against the dollar provided a reason.

...Mizuho Bank in Hong Kong, Asia currency strategist Ken Cheung also believes that, faced with the pressure and fluctuations in the renminbi will be intensified. "Some investors believe that the end of the two sessions, the driving force of China's central bank to maintain a stronger yuan will be reduced," he wrote Tuesday in a report to clients, "the yuan continues to appreciate the limited space, the dollar bulls may begin to rebuild positions, we expect the yuan the future will be even greater two-way volatility. "

iFeng: 韩元要进CFETS人民币汇率指数？ 人民币贬值压力加大