This video takes a look at one of the topics in the latest edition of the Weekly Macro Themes report - the near term outlook for the USDCNY. The charts show that while the US dollar vs Renminbi exchange rate has been locked in a tight range the fundamentals still point to devaluation pressure for the Chinese yuan. The recent tight range-trading follows a period of fairly persistent depreciation for the CNY. This period of range-trading has lulled the market into a sense of complacency and our indicators show the market is increasingly relaxed about the prospect of further devaluations - history shows that these indicators work in a contrarian fashion, thus the conclusion is that while price movements have slowed down, the risk levels are rising.
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