RBF UCITS Monthly - January 2017

• Offshore renminbi (CNH) appreciated 2.17% against the dollar
• The Fund’s USD I Class gained 4.10% in January.
• China data releases indicate economic stabilisation
• Largest contributors to performance were holdings in Middle East and CNH overlay
• The more dovish Fed is on hold given the uncertainty of the new US presidential administration

A broadly positive month for risk assets saw the offshore renminbi appreciate 2.17% against the dollar, and 2.79% on a total return basis. Last month President Xi Jinping took centre stage at the World Economic Forum in Davos, the first for any Chinese leader. High up on his agenda was the importance of economic globalisation and free trade; in the face of less trade-friendly US rhetoric. Jinping also echoed what Chinese policymakers have reiterated time and time again, that it is not their wish to devalue the renminbi to make exports more competitive. Instead their intention is to manage the redback against the recently expanded CFETS currency basket; of which the dollar is a large component. With non-manufacturing activities making up over half China’s GDP, coupled with the efforts to reform the country’s economy to more sustainable, consumer-led growth it would be counterintuitive to devalue the renminbi.

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