News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30AM EST (12:30 GMT) on DailyFX!! - https://t.co/lxd5fZnn4H
  • 🇯🇵 PPI YoY (APR) Actual: 3.6% Expected: 3.1% Previous: 1.2% https://www.dailyfx.com/economic-calendar#2021-05-16
  • 🇯🇵 PPI MoM (APR) Actual: 0.7% Expected: 0.5% Previous: 0.6% https://www.dailyfx.com/economic-calendar#2021-05-16
  • 🇯🇵 PPI YoY (APR) Actual: 3.6% Expected: 3.1% Previous: 1% https://www.dailyfx.com/economic-calendar#2021-05-16
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/Yo3MIcZ40C
  • 8 out of 9 Dow Jones sectors ended higher, with 83.3% of the index’s constituents closing in the green. Energy (+2.62%), materials (+2.57%) and financials (+2.20%) were among the best performers, while communication services (-2.01%) trailed behind. https://t.co/N92M1qPfCX
  • RT @Fxhedgers: MUSK DOESN’T DENY THAT TESLA SOLD ALL THEIR BITCOIN HOLDINGS - TWEET
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/CDAmncXkaR
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Find out about the recent history of ISM data, how to track it, and how to trade its release here: https://t.co/MZtBh88nOv https://t.co/hTUNcuig70
  • US equities endured turbulent price action last week and could be positioned for further volatility as fundamental forces butt heads and investors look to negotiate the shifting landscape. Get your market update from @PeterHanksFX here: https://t.co/DcI8LXFLtY https://t.co/U1MEE8OmZg
Yuan to Take Clues from New Yuan Loans, NFP

Yuan to Take Clues from New Yuan Loans, NFP

Renee Mu, Currency Analyst
Yuan to Take Clues from New Yuan Loans, NFP

Fundamental Forecast for the Yuan: Neutral

The USD/CNH broke above a key level of resistance at 6.8845 on Friday, driven by the Dollar advance following an increased odds in Fed rate hike. The offshore pair also climbed above the onshore USD/CNY, indicating a weaker Yuan in the offshore market. Looking forward, the Dollar strength, a heavy Chinese calendar and the on-going top Chinese conferences may add mixed moves to Dollar/Yuan rates.

The USD/CNH was right below 6.9088, the 61.8% retracement of the January drop, as of 3pm EST on Friday. This is the next key resistance level to watch for the offshore pair. A sustained break above this level may bring up the possibility of the long-term bullish trend in the offshore pair, which will be bearish for the Yuan. The U.S. Fed Chair Yellen said Friday afternoon that “March hike is appropriate if economy evolves as expected”. This makes all eye on the February Non-farm Payrolls print to be released on March 10th. If the read falls in line with Fed’s expectations, it may further boost the likelihood of a March rate hike. In turn, this would drive the Dollar/Yuan higher. Also, one of the voting members of FOMC, Neel Kashkari, will give a speech at 3pm EST next Monday. It could add some volatility to the FX market as well.

On China’s side, the National People’s Congress (NPC) will release the economic outlook and targets on Saturday night EST, which may drive Yuan moves. Also, a heavy calendar of Chinese data is likely to further elevate the Yuan’s volatility. Both exports and imports are expected to continue to improve in February according to consensus forecasts from Bloomberg. If that is the case, it will be good news for China amid an economic slowdown.

The New Yuan loans, a major indicator that may impact the PBOC’s monetary policy, is expected to drop to 920 billion Yuan in February from 2.030 trillion Yuan in the month prior, the second-highest level on record. In order to curb excess liquidity flowing into the housing market and other financial markets, the PBOC has been delicately managing its cash injections through open market operations. The Central Bank withdrew a net of 280 billion Yuan this week and has been removing liquidity from markets for the seventh consecutive trading days. The regulator targets to bring monetary policy back to neutral from slightly loose. Total new credit issued, home loans and property prices are three key gauges that the regulator may use to evaluate whether monetary policy has returned to neutral.

The February Consumer Price Index is likely to drop below 2% in February, after seasonal expansion in spending sent it to 2.5% in January. This leaves a significant amount of room before the gauge can reach the targeted 3% inflation rate (this ratio may be updated at China’s annual NPC meeting at NPC on Saturday night). Another indicator to keep an eye on is China’s foreign reserves, which is expected to continue to fall in February. Amid such drops, China may hesitate to support the Yuan as it will need to further burn foreign reserves.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES