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在线翻译:
szdaily -> Markets
Yuan investors’ new safe haven, for now
    2017-September-7  08:53    Shenzhen Daily

TWO years after Chinese policymakers devalued the yuan, the currency is the best performer in Asia and momentum indicators are near the highest since 2005. Typical risk-off events seem only to heighten demand for the exchange rate. North Korea firing a missile? Buy the yuan. Dysfunction in the White House? Buy the yuan.

Several factors are helping cement the currency’s recent status as a sure bet. The slumping U.S. dollar is prompting traders to find alternatives. The yen’s position as a global haven is undermined by Japan’s vulnerability to North Korean missiles. Capital controls have stifled outflows from China, while surging stock markets in Shanghai and Hong Kong are increasing the lure of the nation’s assets.

“There’s talk of the yuan as a safe haven because investors have come around to the view that the People’s Bank of China won’t let it slide,” said Mark Williams, chief Asia economist at Capital Economics Ltd. in London. “But the picture could change if President Donald Trump introduced wide-ranging trade sanctions on China or if something caused the U.S. dollar to strengthen abruptly.”

For now, at least, the yuan has a number of things going for it.

The People’s Bank of China has tightened funding conditions this year while the Federal Reserve has signaled a cautious approach to further rate hikes, contributing to China’s widening yield advantage. Then there’s the reversal in the so-called Trump trade as investors unwound bets on an ambitious growth agenda.

“The yuan has found support from an unexpected source: President Donald Trump,” Bloomberg Intelligence analysts Fielding Chen and Tom Orlik wrote in a note. “Political turmoil in the United States has dented the dollar.”

China’s economic data have also held steady, and while Trump outlined plans for new sanctions that could target China, investors remain unconvinced he will actually take action.

If the United States restricts trade with China, “all that’s really going to happen is for those products which you can’t substitute locally, the prices are going to go up, so it’s going to be inflationary for the consumers inside the United States,” said Hayden Briscoe, head of Asia Pacific fixed income at UBS Asset Management in Hong Kong.

Because of China’s massive current account surplus, forex reserves and capital controls, the yuan has always been steadier than most emerging-market currencies. (SD-Agencies)

 

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