Celent has released a report today that documents the progress being made in the internationalisation of the renminbi (RMB), and outlines the opportunities that this represents for market participants, as well as the challenges it presents.
Discussing how investment managers can benefit from RMB internationalisation, the report says that they should consider adopting new strategies to respond to greater short-term volatility in the currency.
It notes that investment managers have traditionally looked to gain from China’s one-way currency appreciation and hold bonds till maturity.
“But Chinese regulators’ abandonment of circuit breakers and other protective measures means traditional expectations of regulatory intervention may not hold going forward, opening up more opportunities for short-term price fluctuations,” says the report.
At the very start of June, Profit & Loss published an article looking at why demand for cryptocurrencies had spiked in 2017, with the price of bitcoin rising over 200% between January and the latter end of May.
Subsequent to that, demand continued to grow, with the price of bitcoin reaching $4,950 by the start of September. Meanwhile ether – the native cryptocurrency of the Ethereum network – went from $8.29 at the start of the year to $388 by September.