Demand for investment ideas referencing offshore Chinese renminbi has tapered as volatility has fallen and outlook for appreciation against the U.S. dollar has waned, David Naville, managing director and head of fx structuring Asia Pacific at Barclays Capital in Hong Kong, told DI in an in-depth interview
Naville said bespoke cumulative performance derivatives referencing USD/RMB rely heavily on China appreciating its currency. The payout occurs if China allows CNY appreciation against the dollar every month on a one-to-two-year tenor. If the Chinese currency depreciates on any month, the coupon paid out is smaller.
David NavilleThe Chinese authorities will likely hold off further appreciation of its currency this year as it battles slowing growth and the fallout from Europe’s sovereign debt crisis, according to market strategists. The National Bureau of Statistics of China released figures this week showing an 8.9% growth in gross domestic product. While the figures are ....