DOES INVESTOR ATTENTION MATTER to RENMINBI TRADING?

Given that renminbi always breaks the historical high against USD, psychological literature on limited investor attention motivates me to consider whether this eye-grabbing event would have an impact on renminbi trading. Empirical evidence suggests that both nearness to the historical high and hitting the historical high negatively affect renminbi future returns. This result survives from a variety of robustness checks. My findings are consistent with the conservatism theory and suggest that investors tend to under-react in response to the news of breaking the historical high.