Ebrahim Rahbari in Conversation with CNBC

ASR’s Head of Rates Strategy, Ebrahim Rahbari, joined CNBC’s Sam Vadas to discuss the complexities of valuing the yuan and its broader implications. 

He agreed that the current US administration perceives the Yuan as a symbol of unfair trade practices. While China has taken limited measures, sentiment remains fragile. Meanwhile, it seems that U.S. is intentionally weakening the dollar, though its policy approach appears more focused on domestic restraint and fiscal expansion abroad.

Rahbari noted that the PBoC is unlikely to allow significant yuan depreciation, prioritizing currency stability. Unlike 2018, when trade tensions drove currency moves, the current pressure stems from China’s struggling property sector. With the U.S. already expensive, there is limited room for further dollar appreciation. Instead, attention should shift to the yuan’s performance against the yen and other less overextended currencies.

Ebrahim also discussed why the case for Dollar strength has weakened and that he does not put much weight on the increasing market discussion of potential Fed rate hikes in the foreseeable future.