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.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • US #NaturalGas futures (Henry Hub) shoot past 6USD during Tuesday's Asia-Pacific trading session (though prices have trimmed most gains), nearing the 2014 high Prices have climbed over 37% since September 23rd
  • WTI #CrudeOil prices extend gains during Tuesday's Asia-Pacific trading session, nearing the July high at 76.95 Prices are up almost 0.9% on the day so far
  • 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:
  • Brent oil prices hit $80 per barrel for the first time since October 2018 #trading #OOTT
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here:
  • This week has started with the recovery rally in risk assets stalled and the Dollar looking down multiple barrels of fundamental threat in monetary policy and debt politics. $EURUSD is well positioned as indicator 1.1650-1.1750
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here:
  • AUD/NZD, Could This be the Turnaround? - #AUDNZD chart on @TradingView
  • Another pleasure being on @ausbiztv with host @AusAndrewG talking about US indices, rising bond yields and $USDJPY Check out the full interview here! -
  • 🇦🇺 Retail Sales MoM Prel (AUG) Actual: -1.7% Previous: -2.7%
Chinese Yuan Risks Drop to 12-Month Lows On Heavy Data

Chinese Yuan Risks Drop to 12-Month Lows On Heavy Data

John Kicklighter, Chief Strategist
Chinese-Yuan-Risks-Drop-to-12-Month-Lows-On-Heavy-Data_body_Picture_1.png, Chinese Yuan Risks Drop to 12-Month Lows On Heavy Data

Fundamental Forecast for the Renminbi: Neutral

  • A rebound for the Yuan faltered quickly this past week and put the currency back at 12-month lows versus the dollar
  • Risk trends are a key aspect for this currency, but it isn’t as sensitive as other emerging market counterparts
  • 1Q GDP will be this week’s top scheduled event risk, but financial measures should be paid an equal mind

Open an FXCM account and trade the Renminbi (USDCNH)

The Chinese Yuan (also called the Renminbi) attempted a recovery in its opening move of this past week, but the currency would ultimately end back up on the cusp of 12-month lows against its US counterpart. No doubt risk trends played a significant role in this failed attempt at liftoff. With global equities on the lam, the frequent financial headlines lamenting China’s slowing growth, impending wave of defaults and asset bubbles are taken more seriously. Will the international market’s scrutiny increase this week as speculators come under pressure? Will heavy economic docket alter the Yuan’s position on the global scale? These are the question we should ask to determine whether USDCNH will mark its break above 6.2500 or below 6.1750.

Historically speaking, USDCNH maintains a strong negative correlation to the S&P 500. In other words, the Chinese currency has risen consistently alongside the ‘risk trends’. Fundamentally, this makes sense. Investors seeking higher return on their capital put their money to work in China where relative returns mirrors the country’s astounding growth rate. Naturally, when the tide goes back out on sentiment, funds are repatriated to seek stability. However, the situation is a little more unique with China.

First and foremost, there is an issue with the scale of risk aversion. While we have seen genuine stumbles in exuberance these past years, we haven’t seen anything on the scale that would shake highly leveraged positions nor the less liquid investments in China. To turn the Yuan into a more sensitive emerging market currency (like the South African Rand, Brazilian Real or Indonesian Rupiah), we need to see a greater sense of conviction.

Another unusual aspect that has kept this pair from deviating from its long-term depreciation (Yuan gain) are the external controls – and the speculative distortion that has. The PBoC sets the USDCNY reference every day and doesn’t allow fluctuation greater than 2 percent around its band. Under the assumption that Chinese authorities will continue to loosen the exchange rate as it approaches ‘fair value’, investors feel particularly confident about investing in the country expecting stability. That has led to what many call the ‘China Carry Trade’. Yet, debt defaults, asset bubbles and curbs on capital outflow can quickly work against those same investors.

A more traditional route to volatility – event risk – may be tempted in the week ahead. China’s calendar is dotted with foreign reserves, lending, foreign direct investment (all without specific days for release) as well as precisely timed business activity, fixed assets, retail sales and industrial production figures for March. However, the big ticket item will certainly be the first quarter (1Q) GDP report. The consensus is for the country’s pace of growth to slow from 7.7 percent in the final months of 2013 to 7.3 percent. The Premier and Central Bank Governor have both said that would be within the tolerable band, but will investors be so confident as defaults mount and officials deny fresh rounds of stimulus? - JK

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