Despite the People’s Bank of China (PBOC) has announced to cut its Reserve Require Ratio (RRR) by 100bps on Friday, however it looks like a no brainier to me to short the USDCNH now with a SL around 6.98. I know some banks has immediately improved its USDCNY target price to above 7.1 after the news, however the chart seems to be showing the opposite and it just do not make sense for China to allow its currency to further depreciate when they have USD 1.3 trillion external debt and are already in credit crunch.
