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Apr 25 - 12:55 PM

USD: It is Unlikely That EUR/USD Will Stop Falling Until USD/CNY Peaks - SocGen

By eFXdata  —  Apr 25 - 10:45 AM
Societe Generale Research discusses the impact of USD/CNY on EUR/USD and the USD in general in the near-term.
 
"How far the Chinese authorities allow the yuan to weaken will make a big difference. It’s playing catch-up with other currencies’ falls against the dollar but the yuan is one of the three most important currencies in the world, and a major part of almost every other currency’s trade-weighted basket. So it's not as simple as saying that the last time EUR/USD was at 1.07, USD/CNY was above 7, so there’s no threat to the euro here," SocGen notes. 
 
"It is unlikely that EUR/USD will stop falling until USD/CNY peaks. Indeed, it is unlikely the dollar peaks overall, before the USD/CNY has peaked, and when that happens depends as much on the Chinese authorities as the US," SocGen adds. 
Source:
Société Générale Research/Market Commentary

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