The Renminbi has been losing its value against other major currencies including the U.S. Dollar over the last couple of months. Still, on Monday, the Chinese Yuan showed unexpected strength against its American counterpart, Masterforex-V Academy reports. Moreover, it should be noted that the Renminbi managed to show the biggest daily gains over the last 10 years!
Experts say that these gains have to do with the fact that major players have finally returned to the Chinese market after Chinese New Year. Specifically, the Renminbi gained as much as 1,15% against the U.S. Dollar over the course of Monday’s trading hours. This means that USDCNY dropped by 1,15% at a time, which is something we haven’t seen since November 2005. As a result, the People’s Bank of China took a fairly logical step to change the USDCHNY exchange rate to 6,5118 CNY per 1 USD.
Market Leader reminds you that China celebrated Chinese New Year during the past week, which is why domestic Chinese markets are closed for holidays. Some experts report that in Hong Kong , the so-called offshore Yuan got stronger by 0.26% and reached the level of 6.497. In this case, we are talking about the Chinese currency traded outside of China.
International experts say that the situation may well continue. After a short timeout related to the holidays, the local traders and investors become more active and invest more in domestic markets. This is some kind of a seasonal factor as it repeats itself year by year. Still, the current weakness of the Chinese economy me change the tendency slightly.
In reality, the Renminbi still hasn’t recovered the ground lost after the latest crash. The Chinese financial authorities put the blame for this devaluation on speculators benefiting from manipulations with currencies. They say that there were no internal reasons for such a sharp decline. From now, on Chinese authorizes are determined to do their best to prevent speculators from affecting the Renminbi.
USDJPY
The policy pursued by the Bank of Japan to stimulate the Japanese economy find itself in jeopardy last week. As the U.S. Dollar weakened against other majors, this resulted in the Japanese Yen hitting the 15-month high, which corresponds to the 15-month low of USDJPY. At the same time, Nikkei lost 11% over the past trading week. Japanese motor companies led the downtrend with Toyota losing 7%, Honda – 5.5%, Nissan – 5.8%.
For those of you who don’t know, the Bank of Japan has been trying to revive the business activity growth along with weakening the national currency to make Japanese exports more competitive. This has been done through massive financial injections into the national economy. Eventually, the central bank had to use heavy artillery: the bank is going to introduced negative interest rates for commercial banks
So, a new wave of the Japanese Yen weakening against the U.S. Dollar (a rally in USDJPY) is delayed, the SRP Department (AO_Zotik and WPR_VSmark) of Masterforex-V Academy reports. When considering the Daily chart of USDJPY with the help of the SRP tool, we can see a bearish ABC pattern with the next target at 109.68.
