商务英语短文阅读2.docx

商务英语短文阅读2.docx

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商务英语短文阅读2

Investorsshakenasrenminbi’sreputationas‘one-waybet’sours

Lastweektherenminbididsomethingithasnotdoneforyears–itshockedthemarket.

Duringthefinalthreetradingsessionsoftheweek,theChinesecurrencydroppedasmuchas1.3percentagainsttheUSdollar,markingitsbiggestthree-dayfallsince2011.Therenminbiisnow0.6percentweakeragainstthedollarthanitwasatthestartoftheyear.

Whilethepercentagedeclinemayappearsmallcomparedwithsomeoftherecentdouble-digitswingsinotheremergingmarketcurrenciessuchastheArgentinepesoorKazakhtenge,amoveofsuchmagnitudeintherenminbiishighlyunusual.

Itcouldalsospelltroubleforinvestors.Afteryearsofultra-lowvolatilitythankstothemanagedpegagainstthedollar,therenminbihasoftenbeenthesubjectoflarge,highly-leveragedpositionsforinvestorsviewingitasaneffectiveone-waybet.ANZ’sPatrickPerret-Greensaidthesell-offhadleftsomespeculativeinvestorswitha“verybloodynose”.

MitulKotecha,FXstrategistatCréditAgricoleCIB,saidthatlastweek’smovecouldbeasignalofashiftinChinesecurrencypolicy.

“Themarketwasextremelylong,andwe’veseenabigshakeoutofthesepositions”,saidMrKotecha.“Theywanttotryandatleastprovokemoreriskandmoreuncertaintyintakingthistrade.Theyaregoingtokeepengineeringvolatilityuntilthatbecomesthecase.”

Thesharpmovefollowsaperiodduringwhichtheoffshorerenminbiratehasbeentradingatanincreasingpremiumtotheonshorerate.Thatsplit–apermanentfeatureofthemarket–issomethingmadepossiblebyChina’sstrictcontrolsonitscapitalaccount.

GlobalinvestorsusuallytakebetsonthecurrencythroughitsHongKongiteration,knownbytheshorthandCNH.WithinChina,companiesandinvestorsusetheofficialonshorerate,orCNY.

Earlylastweek,theCNHratehadreacheditsbiggestspreadovertheCNYratesince2010,suggestingthatinternationalenthusiasmfortherenminbihadovertakenthatfromwithinChinaitself.

CurrencyanalystssaythiswideninggapmayhaveproddedthePeople’sBankofChinaintoaction.Thecentralbanksetsthedailyfixingratearoundwhichtherenminbiispermittedtofallorgain1percentaday,andlastweekitguidedtheonshorecurrencyweakerthroughhigherfixes.

SomebelievethatthemovebythePBoCtodampappreciationexpectationsispartofitswider,long-heldaimofintroducingmoretwo-wayvolatilityintothemarket.

Itcouldalsobeanattempttobringtheonshoreandoffshoreratestogetherbeforethecentralbankwidensthedailytradingband,somethingithaspromisedtodosoon.ThebandwaslastchangedinApril2012,whenitwasdoubledfrom0.5percent.

“Thisisatacticalmovebythecentralbanktointroducemorevolatilitybeforewideningthetradingband.Theyarecreatingconditionsforthattohappen,”saidShuangDing,ChinaeconomistatCiti.“Ifthecurrencycontinuestoappreciateandthereisverylittlevolatility,itwillonlyfuelspeculationofmoreappreciation.”

WeakereconomicdataoutofChinamayalsohaveplayeditspartinthesell-off.LastweekHSBC’sflashindexofmanufacturingactivityfelltoitslowestlevelinsevenmonths,asignthatthecountry’sexportengineisyettofireupthisyear.SentimenttowardsChinahasalsobeenhitbygrowingtroublesinthecountry’svastshadowbankingsector.

Manyanalystsbelievethelonger-termstoryofrenminbiappreciationremainsintact.HSBCstillexpectstherenminbitoreachRmb5.98againstthedollarbytheendoftheyear,equivalenttoabouta2percentgainfromMonday’sspotrate.

Andunlikeinpreviousperiodsofrenminbiweakness–suchasinthesummerof2012–thismostrecentbouthasnotbeenaccompaniedbylargecapitaloutflowsfromthecountry.

Ifanything,theoppositeistrue–themostrecentdatashowthatmoneycontinuestopourin,withChina’stradesurplusgrowingby$32bninJanuary.

However,somebelievethattheapparentshotacrossthebowbythePBoCmeansthatthedaysoflowvolatilityarefinallycomingtoanend.

“Basedonhowthe[offshorerenminbi]hasbeentradingoverthepastcoupleofdays,itiscleartomethattheChinesecurrencyisnolongerasafehaven,”SociétéGénérale’sBenoitAnnewroteinareport.

TwoUKbanks'divergingfortunes,thelatestEU-Greecebankingspat,andUSholdingcompanyrequirementsforforeignbanksFeb24,2014-3:

43pm

ThebankingteamdiscussesthevaryingfortunesofHSBCandRBS,thelatestspatbetweentheEUandGreeceoverthetreatmentoftheGreekbankingsystem,andDeutscheBankrevealssomedetailsabouthowitwillcopewiththenewobligationforforeignbanksoperatingintheUnitedStatestohaveaUSholdingcompanies.PatrickJenkinsisjoinedbyMartinArnold,bankingeditor;SamFleming,financialpolicycorrespondent;DanielSchäfe