Yuan Gaining - Trade wars coming to an end, US and China - Eagles

Yuan is gaining after efforts from Beijing, China-US trade tensions are still set high after 2 months of a trade war and it seems Beijing its taking a stand. The disadvantages related to a still weaker renminbi are greater than the benefits of such a move. Friday the People’s Bank of China publicly stated that banks were trying again to place an adjustment, for the daily pricing of the yuan’s value.

Neal Kimberley compliment the timing of the People’s Bank of China move to change the Renminbi value, with new US accusations of currency manipulation.

The adjustment is ‘counter-cyclical’ fiscal policy that takes the opposite approach: reducing spending and raising taxes during a boom period, and increasing spending and cutting taxes during a recession

In the current situation of a weak renminbi, re-applying the adjustment will help diminish pressure for renminbi depreciation. At the same time invalidating accusations that China has been intentionally manipulated the yuan lower in order to nullify the effects of US trade tariffs.

The US President D.Trump confident that China is manipulating its yuan

A weak yuan is great against US export competitiveness giving China some protection from the impact of US trade tariffs. The weak yuan has been identified by the White House as a intended currency manipulation. In reality, Washington tends to apply a double standard on all issues they consider a threat to the US economy.

For now, the adjustment should point to a stronger yuan than what we experience for the past two months. With the adjustment in place, it can be later interpreted as a form of interference in the market pricing.

The yuan is gaining in straights proving the adjustment is working


Following the daily chart on USDCNY, we can see that the yuan is gaining. With the use of a couple of indicators such as Moving Averages and Stochastic, clearly, the yuan is gaining. Straight after the announced adjustment, however, that is just the fundamental part of the movement.

Understanding fully how the yuan will behave in the future is safe to assume anything can happen from press-conferences to

In Beijing defense, sources showed that renminbi weakness isn’t only against the US dollar. Collective data shows the renminbi weakness has also extended against other major currencies such as the Euro and Japanese yen.

In essence, any attempt by Beijing to ameliorate or arrest the pace of yuan depreciation should echo well in Europe. Beijing knows that “the goal of President Trump is to unite the world against Chinese business’.

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