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
Oil - US Crude
Bullish
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
  • Heads Up:🇨🇳 Industrial Profits (YTD) YoY (JUN) due at 01:30 GMT (15min) Previous: 83.4% https://www.dailyfx.com/economic-calendar#2021-07-27
  • Nasdaq 100 at Record High as Tesla Earnings Beat, Will Hang Seng Rebound? https://www.dailyfx.com/forex/market_alert/2021/07/27/Nasdaq-100-at-Record-High-as-Tesla-Earnings-Beat-Will-Hang-Seng-Rebound.html https://t.co/RKIZk3JM5N
  • Please join @FxWestwater at 22:00 EST/2:00 GMT for a webinar on preparing to trade commodities markets in the week ahead. Register here: https://t.co/qTOa61aMmN https://t.co/gsJWRtnAMe
  • The Nasdaq 100 index climbed 0.09% to a record high, lifted by large-cap stocks such as Tesla (+2.21%), Alphabet (+1.33%) and Amazon (+1.18%). https://t.co/R4JvuR31sx
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/HPA1Fj43Lc
  • RT @BrendanFaganFx: IBEX 35 Analysis: Rally Continues Despite Virus Fears, Focus Shifts to Fed Link: https://www.dailyfx.com/forex/market_alert/2021/07/27/IBEX-35-Analysis-Rally-Continues-Despite-Virus-Fears-Focus-Shifts-to-Fed.html https://t.co/…
  • RT @FxWestwater: Asia AM - Australian Dollar Forecast: $AUDUSD May Rise on Chinese Industrial Profits Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2021/07/26/Australian-Dollar-Forecast-AUDUSD-May-Rise-on-Chinese-Industrial-Profits.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https:…
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/c36fpKL4nN
  • 🇰🇷 GDP Growth Rate QoQ Adv (Q2) Actual: 0.7% Expected: 0.7% Previous: 1.7% https://www.dailyfx.com/economic-calendar#2021-07-26
  • 🇰🇷 GDP Growth Rate YoY Adv (Q2) Actual: 5.9% Expected: 6% Previous: 1.9% https://www.dailyfx.com/economic-calendar#2021-07-26
Yuan Losses Likely to Ease ahead of Top Party Congress

Yuan Losses Likely to Ease ahead of Top Party Congress

Renee Mu, Currency Analyst
Yuan Losses Likely to Ease ahead of Top Party Congress

Fundamental Forecast for CNH: Bullish

  • A relatively stable Yuan is likely more favorable by the authority ahead of China’s 19th Party Congress.
  • The PBOC may begin to use the “counter-cyclical” factor to curb overselling in the Yuan once again.
  • New Yuan Loans and other event risks could impact Yuan’s intraday moves.

Chinese regulators are closely watching USD prices. What’s the Dollar trend to year-end? See our Q4 forecasts.

The offshore Yuan extended losses against the U.S. Dollar for the fourth consecutive week, amid the continued Dollar strength. As of the Friday close, the Yuan has almost erased gains accumulated since early August, when the PBOC began to proactively guide the Chinese currency stronger. Yet, the reversal seen in the USD/CNH may suspend next week when China’s onshore market reopens after a week-long holiday. As from then on, the most important theme will be China’s 19th Party Congress meeting, which will kick off in less than two weeks. In additional to this primary driver, event risks, such as September New Yuan Loans and trade gauges, could add volatility to the Yuan as well.

China’s 19thParty Congress, to take place on October 18th, will reveal the structure of top party leaders in the coming five years, as well as a broader picture of economic policies. Implementing reforms while maintaining the growth is a key task for leaders. The new authorities are likely to maintain the proactive fiscal policy and prudent monetary policy for a considerable period; while, the challenge is how to solve a series of complicated issues, such as price bubbles, high leverage and state-owned enterprises’ defaults. China’s strategy in the next five years could determine whether the economy will steadily pick up or head towards a lower low.

In the near-term, a stable Yuan is likely to be more favorable around this key meeting, from an authority’s point of view. At the same time, Yuan’s external pressure is seen reduced: the U.S. Dollar (DXY) has rose to a resistance zone; whether its strength can continue is still a question. Also, there are instances that the PBOC uses the “counter-cyclical” factor in the guidance rate formula to counter against overselling in the Yuan. (This recently-added component is an unknown part for markets). All the above-stated factors may help the Yuan to continue its medium-term bullish trend which started from May, despite of recent retracements.

In terms of intraday moves in the Yuan, economic events could be main drivers, such as New Yuan Loans. The components of total loans are more important than the aggregate figure itself. In August, medium-term and long-term home loans’ weighing dropped to 41% from 55% in the month prior; this is a desirable change in the loans structure, as the proportion of cash flowing into the real estate sector, with high risk of price bubbles, was reduced. On September 30, the PBOC announced a 0.5%-1.5%cut of reserve requirement ratio (RRR) for banks that can lend enough to small business. This measure also serves the purpose to guide the liquidity flow into desirable sectors, where companies need the investment the most and could generate new momentums for the economy.

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

DISCLOSURES