Fed Cuts May Send $1 Trillion FX ‘Avalanche’ to China, Jen Says
- Firms may convert foreign-exchange into yuan as Fed cuts
- Such a move may lead to a 10% advance in the yuan: Stephen Jen
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Chinese companies may be enticed to sell a $1 trillion pile of dollar-denominated assets as the US cuts interest rates, a move which could strengthen the yuan by up to 10%, according to Stephen Jen.
The chief executive of Eurizon SLJ Capital said currency is now the biggest risk that’s not priced in properly across markets — and the yuan may play an outsized role.