China's February trade data underscore

China's February trade data underscore view that its status as a source of regional currency stability is under pressure, says HSBC's Asian FX strategist Richard Yetsenga; "along with the normalisation in China's trade account and catch-up with weak exports elsewhere in the region, China is also facing a sharp decline in FDI flows this year and the early signs of some re-dollarisation by Chinese savers. While we expect China to persist with keeping the spot exchange rate in a narrow range for now, the calls for depreciation onshore are likely to only gather momentum." Now that JPY has begun to weaken, CNY is strongest trade-weighted currency in world, he says; "these forces should be increasingly reflected in a higher dollar/yuan NDF curve and also further declines in China's FX reserves. In sum, the market will worry incresingly about China's role as an anchor for the region." Likes 1-year USD/CNY NDFs