6 Jul 2015
Volatility but USD/CNY in tight 0.2% range - BAML
FXStreet (Guatemala) - Analysts at Bank of america Merrill Lynch explained conditions surrounding the less active USD/CNY.
Key Quotes:
"To say there has been a lot of volatility lately is an understatement: no major market has been immune to the gyration in global economic data, the escalation of the Greek crisis, and shifting expectations of when the Fed will start hiking rates. One market has been the exception: USD/CNY."
"After a roller coaster ride at the end of last year and the beginning of this year, it has been stuck in a 0.2% range since the middle of March.
Its eight-week realized volatility has fallen to just 0.8, near the lowest level in 10 years."
"Since Beijing abandoned the USD peg in 2005, there have only been two other occasions on which USD/CNY volatility was lower: 2008-10 and 2013.
The depressed volatility of USD/CNY is in a sharp contrast to the recent spike in Chinese equity volatility."
Key Quotes:
"To say there has been a lot of volatility lately is an understatement: no major market has been immune to the gyration in global economic data, the escalation of the Greek crisis, and shifting expectations of when the Fed will start hiking rates. One market has been the exception: USD/CNY."
"After a roller coaster ride at the end of last year and the beginning of this year, it has been stuck in a 0.2% range since the middle of March.
Its eight-week realized volatility has fallen to just 0.8, near the lowest level in 10 years."
"Since Beijing abandoned the USD peg in 2005, there have only been two other occasions on which USD/CNY volatility was lower: 2008-10 and 2013.
The depressed volatility of USD/CNY is in a sharp contrast to the recent spike in Chinese equity volatility."