After four months of turmoil in the RMB complex, FX policy seems to be transitioning to a more neutral stance. Over the past week, we have noticed some shifts in dynamics. In particular, after having persistently fixed USD/CNY at levels above our static trade-weighted basket model from February to May; the authorities have started to fix much lower. The shift in policy bias is likely a result of the fact that the objectives set out by the authorities at the beginning of the FX squeeze are gradually being achieved. We have closed our long 1Y USD/CNH call spread and straddle trades and expect USD/RMB to trade within a range for the time b
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