Chinese Renminbi switched to premium in deferred months

[comintel]

The Chinese currency a week or so ago suddenly switched from being inverted (deferred months lower) to "normal" (deferred months higher in price).

Can anyone explain this?

Is it just market expectations?

Whatever happened to "interest rate parity."

During all of this time the spot rate for the renminbi has not moved much.

I have been short the renminbi (aka yuan) for some months in anticipation of an eventual competitive RMB devaluation. I have been losing money all this time as the deferred months rise in price as they become current. (It is only a small position among others so it is not a significant loss).

The new slope appears to make it much more attractive to short the renminbi,

(I am used to talking in terms of the futures price which is quoted as CNYUSD. If you are more used to forex USDCNY then the graphs would of course be the other way up).

Any comments?

 

[intradaybill]

The Chinese currency a week or so ago suddenly switched from being inverted (deferred months lower) to "normal" (deferred months higher in price).

Can anyone explain this?

Belief that China is going out of recession. Before there was a lot of demand for spot currency and the cost of carry was negative due to deflation expectations.

 

[comintel]

Belief that China is going out of recession. Before there was a lot of demand for spot currency and the cost of carry was negative due to deflation expectations.

So if China is coming out of recession then it is logical to expect that its currency will rise?

 

[The Baptist]

who trades it? reminbi/USD