Inverse relationship between China A50 and RMB. - Part 2

Blue line: China A50
Black line: USD/CNY (RMB)

http://sg-stock.blogspot.com/2019/03/inverse-relationship-between-china-a50.html

As stated previously, China A50 and RMB have an inverse relationship.

Why?

The rationale is very simple.  When RMB depreciates, it will result in investors' forex losses and this will prompt investors to pull money out of China A50.  When the investors sell China A50, they will convert the RMB back into their local currencies and result in weakening RMB.

Therefore, if investors can predict the future RMB trajectory, they can predict the future movement of China A50.

RMB is expected to depreciate in a US-China trade war.  Therefore, the decline in China A50 is a known consequence.