SINGAPORE- Brokerages in China have dropped detailed currency forecasts from their research notes, or have restricted access to them, underlining the growing sensitivity in the financial sector to a regulatory clampdown on speculative investment.
Their disappearance follows pressure to avoid stockmarket forecasts as well as a ban by authorities on publishing commodity prices, amid a series of sprawling crackdowns that are re-shaping China’s economy and upending financial markets.
It also comes at a delicate moment for the yuan, which China has sought to promote as a global reserve currency but which is tightly managed by the central bank and has been stubbornly firm recently despite a broadly strong dollar.
The market effect of publishing only generalized forecasts is unclear, particularly as foreign institutions continue to offer precise ones. Clients can also privately access projections – a useful tool for corporates in managing foreign exchange exposure.
Multiple sources at brokerages and banks said the trend of avoiding detailed public forecasts has become widespread over the past few months.
Reuters’ analysis of months of notes from four brokers in China shows once-detailed forecasts for the Chinese currency against the dollar have now vanished or grown fuzzy, with precise predictions replaced by ranges or vague statements. None of these brokers answered to questions about the shift. – Reuters
