From: Richard Kahn To: "Jeffrey E." <[email protected]> Subject: Fwd: GS: Market ripples from a weaker CNY Date: Wed, 12 Aug 2015 15:14:30 +0000 Attachments: Market_ripples_from_a_weaker_CNY.pdf Goldman commentary on CNY Richard Kahn FIBRK Associates Inc. Begin forwarded message: From: "Taylor, Judie" Subject: GS: Market ripples from a weaker CNY Date: August 12, 2015 at 9:28:08AM EDT To: "Kahn, Rich" GIR views modest impact from devalued Yuan: Market ripples from a weaker CNY • For the second day running, the PBoC has raised the $/CNY fix by close to 2%. • This shift in the currency is consistent with weak underlying activity in China. • We think the move in the currency so far will have only a modest impact on exports ... • ... and does not change our view of sluggish China commodity demand. • While on the margin the resulting strength in the USD reduces the likelihood of near-term Fed tightening ... • ... we think the overall impact on US growth and inflation will be limited compared with other economies. • We continue to favour the USD over commodity currencies and the EUR • ... and think that US data will be the primary driver of US rates over coming months. • Consistent with our core view, we remain cautious on EM equities. Full report attached. Best, Judie Z. Taylor Investment Management Division Goldman. Sachs & Co. EFTA01191119