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.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
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
Gold
Bearish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • RT @lisaabramowicz1: Today has seen the biggest one-day drop in 10-year Treasury yields since 2016, with the level now just basis points aw…
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.82%, while traders in USD/CAD are at opposite extremes with 70.18%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/bULTh7GRop
  • The price of #gold climbs to a fresh monthly high ($1681) as the #coronavirus drags on the global supply chain, and the precious metal may exhibit a bullish behavior over the remainder of the month. Get your $XAUUSD market update from @DavidJSong here: https://t.co/h02KVH9bWE https://t.co/cgq8X9gGZ3
  • Commodities Update: As of 17:00, these are your best and worst performers based on the London trading schedule: Silver: 1.90% Gold: 1.88% Oil - US Crude: -4.97% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/oZ1KxQywNr
  • Wall Street IG Client Sentiment: Our data shows traders are now net-long Wall Street for the first time since Oct 03, 2019 when Wall Street traded near 26,200.30. A contrarian view of crowd sentiment points to Wall Street weakness. https://www.dailyfx.com/sentiment https://t.co/XRLFJCPPtr
  • Forex Update: As of 17:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.97% 🇪🇺EUR: 0.13% 🇨🇭CHF: 0.06% 🇦🇺AUD: -0.20% 🇬🇧GBP: -0.27% 🇨🇦CAD: -0.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/EI1p6OLSRi
  • For the $SPX, this week's opening gap is the worst seen since August 1981 https://t.co/fVM4fHIGcB
  • As far as I can tell, this is the sharpest gap lower to start a week for the benchmark Dow since August 1998 https://t.co/YwPwGbGrL3
  • One of the more desired conditions that traders can look for are short-term reversals in price. Candlesticks themselves can help us see some of these potential reversals, with the Pin Bar. Find out how you can incorporate Pin Bars into your strategy here: https://t.co/0RFcb0Rpja https://t.co/vj3XW5aKEv
  • Indices Update: As of 17:00, these are your best and worst performers based on the London trading schedule: France 40: -0.08% Germany 30: -0.10% US 500: -3.03% Wall Street: -3.13% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/ggfLLMiWGJ
Yuan May Benefit from Capital Inflows, Trade Talks and Chinese PMI

Yuan May Benefit from Capital Inflows, Trade Talks and Chinese PMI

2018-05-26 02:35:00
Renee Mu, Currency Analyst
Share:
Yuan May Benefit from Capital Inflows, Trade Talks and Chinese PMI

Fundamental Forecast for CNH: Bullish

  • A surge of capital inflows driven by MSCI’s inclusion could continue around the effective day.
  • A detailed trade deal may be reached in the 3rd round talks; long-term outlook remains uncertain.
  • May PMI manufacturing gauges may improve and add evidence to a sustainable recovery.

How to trade news? Learn with DailyFX Free Trading Guides!

The Chinese Yuan had a mixed performance against major currencies over the past week: it advanced for the seventh consecutive week against the Euro while lost to both the U.S. Dollar and Japanese Yen. Looking forward, the Yuan may gain momentums from capital inflows around A shares’ MSCI inclusion. Cloud around US-China trade disputes remains despite of US Commerce Secretary’s upcoming visit to Beijing. China’s manufacturing sector may show further expansion in May, adding confidence to the economy.

MSCI’s inclusion of Chinese A shares will not only lead to this global institution’s direct purchases of Chinese stocks, it will also increase holdings of investors who have been following MSCI indices. Since April, capital inflows have increased significantly through two major channels: Shanghai/Shenzhen – Hong Kong Stock Connect. On May 1, China enlarged the capacity of these channels to four times of what they were in the past. Foreign purchases in Yuan-denominated equities are expected to remain high around June 1, when the inclusion takes effect.

US-China trade development was on a roller-coast ride this week. The two sides seemed to reach a deal to avoid tariff attacks after released a joint statement on Saturday; yet, four days later Trump raised doubts on the agreement and call it “too hard to get done”. On Friday, US Commerce Secretary Wilbur Ross confirmed a trip to China from June 2 to 4, for the third round trade talks. The two parties are expected to finalize details of China’s increased purchases in American products, in specific energy and agricultural products.

The real challenge lies in fundamental discrepancies that the Trump administration has touched on. Many issues such as market entrance barriers, “Made in China 2025” and industrial policies reflect a core different view: how China should move towards a market-oriented economy. Most disputes can be dated back to when the two parties began to trade. Fully resolving them in a couple of months seem to be impractical. The road for US-China trade talks will likely continue to be bumpy, bringing a mixed impact to market.

Next week, China will release both official and Caixin manufacturing PMI prints for May. Amid ongoing trade disputes, the official PMI dropped slightly in April to 51.4 but still higher than the average in the first quarter and better than in the same month of last year; it is expected to hold in May. Caixin PMI, measuring relatively smaller companies, increased in April and is expected to rise further in May. If continued improvement is seen, it will add evidence to a sustainable recovery.

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

DISCLOSURES

News & Analysis at your fingertips.