HSBC’s Currency Expert Says Speed of Yuan Drop Is Frightening

David Bloom, global head of currency strategy at HSBC Holdings Plc, talks about the yuan and Federal Reserve policy. He speaks with Angie Lau on Bloomberg Television’s “First Up.”

The yuan, which is traded freely in Hong Kong, fell as much as 0.64% to 6.6071 Thursday in the offshore market.

“It is the speed of the move that is frightening, not the direction”, commented David Bloom.

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Traders said they noticed large, state-owned Chinese banks selling dollars and buying yuan through the day Wednesday to keep the offshore yuan’s level at par with that of the onshore yuan.

The moves highlight Beijing’s continued struggles to tame the freely traded offshore yuan and guide investor expectations on how far the yuan could fall. In recent weeks, analysts have lowered their forecasts for where the yuan will trade against the U.S. dollar this year.