Many investors believe that the yuan “could come under more selling pressure,” said Stephen Jen, managing partner of London-based hedge fund SLJ Macro Partners LLP. Mr. Jen expects the yuan to weaken a further 10% against the dollar this year.
Stephen Jen, head of currency hedge fund SLJ Macro, said he believed the Fed had “long been overly dovish”, and would “probably use the recent developments as new excuses not to take action in September”.
Suppliers to the country know how hard it is on the outside.
The question is whether it is soft inside. Stephen Jen of hedge fund SLJ Macro thinks urban jobs show China having some success in switching from infrastructure and industry towards services and consumption.
Stephen Jen, managing partner at money manager SLJ Macro Partners LLP in London, said he is worried that the turmoil in emerging markets will continue to grow and that the selloff in risky assets could deepen and broaden later this year.
“I will watch the markets with more concerns than before mainly because [quantitative easing] has been in operation for too long and I am less sure if more morphine will do the trick,’’ said Mr. Jen, a former economist for the International Monetary Fund. “The world’s problems are mostly structural, which money-printing really could not solve.”
“The whole of Europe might need to sacrifice to save Greece,” said Stephen Jen, partner at investment company SLJ Macro Partners.
The ECB would be more inclined to stick with its bond-buying stimulus for longer, effectively printing more euros and dragging down the currency, according to Mr. Jen.
“They would need to continue to inoculate the rest of the euro area,” he said.