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NFP prints at 339k vs estimates of 190k, ave earnings in line at 0.3% MoM

China’s Market News: Yuan Near Key Resistance After G-20 Ends

China’s Market News: Yuan Near Key Resistance After G-20 Ends

Renee Mu, Currency Analyst

This daily digest focuses on market sentiment, new developments in China’s foreign exchange policy, changes in financial market regulations and Chinese-language economic coverage in order to keep DailyFX readers up-to-date on news typically covered only in Chinese-language sources.

- The offshore Yuan moved in the opposite direction of the PBOC’s guidance on Tuesday.

- China’s President Xi Jinping addressed national strategies in the G-20 meetings.

- The State Council will loosen controls on infrastructure investment in the effort of supporting private investment.

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Sina News: China’s most important online media source, similar to CNN in the US. They also own a Chinese version of Twitter, called Weibo, with around 200 million active usersmonthly.

- The PBOC set Yuan’s reference rate by +197 pips or 0.295% stronger against the U.S. Dollar to 6.6676 on September 6. However, following the release of the reference rate, the offshore Yuan weakened against the Dollar, with USD/CNH rising toward the key resistance of 6.7000 once again.

Yuan rates saw steady moves ahead of and during the G-20 meetings which were hosted in Hangzhou, China. As the meetings has ended over the past weekend, the speculation on elevated volatility in Yuan appears to rise again, by testing levels near the key resistance of 6.7000. The PBOC’s daily guidance will signal whether a breakout above this level is agreed by the Central Bank.

In the early portion of the New York session, a weaker-than-expected U.S. Non-Manufacturing print for August sent the Dollar lower against its counterparts including the Chinese Yuan. The USD/CNH dipped below 6.6832, a major support level that it held over the past week.

Created with Marketscope/Trading Station II; prepared by Renee Mu.

Hexun News: Chinese leading online media of financial news.

- The Chinese President Xi Jinping addressed several key issues in the G-20 meetings.

Mr. Xi told that the Chinese government will continue to implement the ‘One-Belt, One-Road (OBOR)’ initiative, which is designated to promote economic engagement and investment along two main routes. The first route runs westward overland through Central Asia to Europe while the second route is a marine route which passes South-east Asia, South Asia, and Africa and finally reach Europe.

In the post-Brexit world, the OBOR initiative will not only promises opportunities for domestic companies but could be also important for China’s counterparts. On August 23rd, Richard Graham, the head of a British parliamentary committee on China relations told that it was a priority to strengthen links among UK, Hong Kong and mainland China and to take advantage of opportunities under the OBOR initiative.

In terms of production cuts, President Xi said that the country will firmly implement the national reduction plan. As of the end of July, China’s manufacturing sector has only completed 38% of targeted capacity cuts in coal and 47% cuts in steel. In order to achieve the annual goal, we will likely to see strict measures to be introduced over the rest of 2016.

President Xi also told that the country will continue to promote a market-driven Yuan exchange rate regime, further open Chinese capital markets and improve Yuan’s global use. The Deputy Governor Yi Gang told that the Central Bank will facilitate the introduction of SDR-denominated bonds and other financial products in China.

China Finance Information: a finance online media administrated by Xinhua Agency.

- The Chinese government will further loosen controls on infrastructure investment, in the effort of providing more opportunities for private capitals, according to China’s Premier Li Keqiang at the State Council meeting on Monday. China’s private sectors are seen reducing investment opportunities and thus holding excessive cash. In order to support them, the Chinese government have been promoting the Public-Private-Partnership (PPP) model and encouraging private firms to participate in projects announced at the 13th Fifth plenum.

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