Goldman Sees Rising Risk of China’s Yuan Repeating January Rout
- Trading wagers on one-off devaluation may intensify again
- Yuan set for fifth weekly drop, longest streak since December
Goldman Sees Risk of Yuan Repeating January Rout
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There’s a growing risk that capital outflows from China may accelerate as the yuan weakens, spilling over into global markets and causing a broad selloff similar to those in January and August, according to Goldman Sachs Group Inc.
“We shift to an outright negative view” on the yuan, strategists led by Robin Brooks wrote in a note Thursday. As the People’s Bank of China guides the yuan lower against the dollar, “the risk is that this re-ignites capital flight in the same manner it did in August (during the mini-devaluation) and around the turn of the year,” they said.