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.

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
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
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
USD/JPY
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
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/7g9pB8D9xK
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/OCLzmXaDCu
  • Technical analysis of charts aims to identify patterns and market trends by utilising differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/UZela9nSIm
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/7oqC3ykBbU
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/IgUIG55MbH
  • Supply constraints, rebounding global demand and rising inflation expectations may drive crude oil prices higher in the near term. Get your market update from @DanielGMoss here: https://t.co/ezPoAwcJt7 https://t.co/NMfk1cYSvE
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/OiRiBVeuzL
  • Crude Oil Prices Aiming Higher on OPEC Surprise, Inflation Expectations - https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2021/03/06/Crude-Oil-Prices-Aiming-Higher-on-OPEC-Surprise-Inflation-Expectations.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $CL #Crudeoil #OOTT #OPEC https://t.co/AKvXWX9DLQ
  • Given the size of the rally in the eleven months preceding the beginning of the current decline a broader sell-off looks warranted. Get your market update from @PaulRobinsonFX here: https://t.co/UxZiSulpwB https://t.co/raXvlzkGbV
  • 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/lp0tmKS9WR
Yuan Weakness to Persist on RRR Cut Bets, Trade War; Equity Losses May Ease

Yuan Weakness to Persist on RRR Cut Bets, Trade War; Equity Losses May Ease

Renee Mu, Currency Analyst

Fundamental Forecast for CNH: Bearish

  • US-China trade war could continue to drag down the Yuan and Chinese equities.
  • A reserve requirement ratio cut could weaken the Yuan but benefit Chinese equities.
  • Chinese regulators may leave the Yuan falling when it continues, while support equites.

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

Both the Chinese Yuan and Chinese equties tumbled this week: the offshore Yuan (CNH) lost -1.13% against the U.S. Dollar, the largest loss on a weekly basis since November 2016; the Shanghai Composite Index plunged -4.37% and dipped 2837.14, the lowest level since June 2016.

Looking forward, the Yuan rate and Chinese stocks may continue to suffer from the intensified US-China trade war, with tit-for-tat attacks. US President Trump has threated to impose tariffs on additional $200 billion Chinese goods. This was after China announced reciprocal tariffs on $50 billion US products in response to United States’ first tariffs action. The U.S. also warned additional tariffs on anonther $200 billion Chinese goods ($50 + $200 + $200 bln in total), if China increases tariffs again.

A core interest that the largest two econmies are fighting for is the development intechnologies, in specific high-tech. For China, this is the sector that will likely get hurt the most in the trade war. Among all Chinese A-shares, computer and telecommunication stocks lost the most during the Wednesday plunge; indices for both sectors fell more than -7%.

In addition, Chinese technology giants have been facing increasing troubles in the U.S. market. The fate of ZTE, a leading telecommunication manufacturer, is still unknown, after U.S. Senate revoked a deal of lifting the ban against it this week. At the same time, a group of U.S. lawmakers asked Google to reconsider its collaboration with Huawei, another leading Chinese tech firm.

In terms of risks from home, the PBOC hinted to cut the reserve requirement ratio (RRR). This could happen as soon as next week according to China Daily. A RRR cut may bring opposite impacts to the Yuan and Chinese equities. On one hand, lowered RRR is an easing measure and thus could drag down the Yuan further. On the other hand, increased liqudity could help Chinese firms to reduce credit risk. A lot of them are highly leveraged and in short of cash on hand. Thus, it will be positive news for the stock market.

Last but not least, Chinese regulators may have different views over a weak Yuan and weak Chinese equities. As Chinese exporters are facing higher tariffs, a weaker Yuan could help to make up for some of their increased costs. Yuan’s daily reference rate set by the PBOC has moved along with the Yuan trading rates, indicating the regulator acknowledged Yuan’s depreciation. Seperately, Yuan’s overnight borrowing cost in the offshore market rose on Friday, which may slow Yuan’s drop; yet, it will unlikely reverse Yuan’s bearish trend.

Regarding equities, Chinese regulators normally will step in when plunges are seen. This is because a panic mood is easily to spread in this market, with a large amount of retail investors, who rely more on rumors and news than analysis, and act more on impulse. With regulators’ support, eased losses or consolidatons in stock prices are likely to see; sharp reversals are less likely due to weak Chinese fundamentals reported recently.

-- Written by Renee Mu, Currency Analyst with DailyFX

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

DISCLOSURES