ICYMI, Reuters popped up a piece on the movement of capital out of China.
A few of the points, in Brief:
- China has increased scrutiny of overseas investments by domestic companies and their use of proceeds from Hong Kong share sales
- Last month China’s commercial banks sold the most foreign exchange to their clients since July last year (ie rising demand for foreign currency)
- Goldman Sachs said the current account showed sizeable currency outflows in January
- “Weak domestic demand and low interest rates present major structural headwinds for the yuan,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.
- China’s major state-owned banks have been constantly seen selling dollars to support the yuan
This article was written by Eamonn Sheridan at www.forexlive.com.
