Jump to content

Chinese yuan forecast: USD/CNH eyes Chinese CPI data ahead of US inflation

Recommended Posts

APAC market rebound may be on the table after US session; Chinese CPI data may influence dollar-yuan exchange rate and USD/CNH technical setup may indicate upside exhaustion.

Source: Bloomberg
 Thomas Westwater | Analyst, DailyFX, New York City | Publication date: Wednesday 11 May 2022 13:12

Wednesday’s Asia-Pacific outlook

Asia-Pacific markets may rebound today after selling eased overnight in US markets. The high-beta Nasdaq 100 Index (NDX) gained 1.30% although the Dow Jones Industrial Average shed 0.26%. Meanwhile, commodity prices slipped across most metals and energy products ahead of tonight’s US inflation data. The high-flying US dollar may receive a boost if the print exceeds analysts’ expectations. The Greenback is at multi-year highs versus several major peer currencies, the Chinese yuan included.

Despite the pullback in crude oil prices, which dropped more than 3% overnight, gasoline prices at the pump have hit a record high in the US. That is partly due to refiner capacity being offloaded more to other products such as diesel. The lack of exports from Russia has placed a higher demand on those heavier fuels at a time when some refinery capacity is offline due to scheduled maintenance. That may help to keep prices elevated downstream in the economy as shipping costs rise due to those fuel costs.

The Australian dollar and New Zealand dollar remain depressed amid the pullback in commodity prices. Iron ore prices are trading near their lowest levels since January, while copper prices are setting fresh 2022 lows. Gold prices fell to the lowest since early February as real yields climbed. The US CPI data due out tonight may influence those metal-sensitive yields, although a rebound for the yellow metal looks unlikely in the short term, given ongoing chatter around a potential 75-basis point Fed rate hike.

Today, APAC traders will have their sights on Chinese inflation data. China’s consumer price index (CPI) for April is expected to cross the wires at 1.8% on a year-over-year basis, according to a Bloomberg survey. Last week, Chinese officials doubled down on the country’s aggressive “Covid-Zero” strategy even as public dissent grows and at the risk of inflicting economic damage to the point of a possible recession. Still, a weaker-than-expected print would make it easier to enact further monetary and fiscal support measures in the economy. That may not be enough to combat the damage done from lockdowns, however.

USD/CNH technical forecast

USD/CNH is lower this week, but the pair remains near its highest levels since early 2020. The Relative Strength Index (RSI) is beginning to show possible warning signs after briefly dipping back into neutral territory below 70 last week. The MACD oscillator’s strength also appears to be receding. Those together may signal that the bullish energy in the pair could be exhausted.

USD/CNH daily chart

1652238400659.pngSource: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 28/11/23 06:00
  • Posts

    • I believe this is nothing but a witch hunt cos apparently Binance is on its way to been the biggest company world over. Also, there are rumours that all this hapenings could be BlackRock making a move to clear the house ahead of the most awaited ETF. Notwithstanding, i took precautionary measures and moved my funds to Bitget and Bybit, better to be safe than sorry yah.
    • Crypto industry maybe seen as one of the fastest growing industries in the world today, boasting of a remarkable growth that is capable of making many forget in a hurry all the hurdles it had to beat during its infancy. Although not void of limitations still, no industry is anyways, it has well exceeded early expectations and earned global interest. So scrolling through my Instagram feeds today and seeing the footballing icon and 8th time Ballon d'or winner, Lionel Messi’s post of him celebrating his 1 year anniversary partnership with the crypto exchange, Bitget, I was left reminiscing all the challenges the industry had to overcome to get to where it is today. As a crypto enthusiast who is eager to see the industry reach greater heights, such high-profile partnership thrills me. For one, for the industry to leap further, the issue of lack of trust must be resolved. Lionel Messi well understands his position in his country Argentina as a demi-god, his 500m global followers on IG idolise him. He and his crew must have done their background checks before endorsing the crypto exchange to protect his reputation and also for his followers’ interest. The global reach from this partnership is also a win for the exchange and the industry in general. It portrays the exchange as trustworthy and reliable, and readily welcomes newbies, further boosting crypto adoption. 2009-2023 has been an adventurous journey for the crypto industry, there might have been some tides here and there but the ship is sailing smoothly. Has crypto industry striked mainstream adoption to afford sealing high-profile partnerships like this? 
    • Binance's former CEO, Changpeng Zhao, has admitted to violating US anti-money laundering laws, which may result in him facing jail time. This news comes as a surprise to many, as CZ is highly regarded in the industry, unlike some other exchange founders who have been caught engaging in fraudulent activities.   The US Justice Department is now seeking a longer prison sentence than the initial 12-18 months and has also denied CZ's request to travel despite his trial starting in February 2024.   Following the news of Binance CZ's guilty plea, more than $1 billion was withdrawn from Binance as investors sought out more secure options due to the uncertainty surrounding the exchange and US regulations.   This raises the question of how this situation will impact the long-term future of cryptocurrency, as well as which exchanges are best for investors at this time.
  • Create New...