The Chinese Yuan sets the pace in the Forex market today. After the currency remained in low ranges, until this Monday it got its best day in the market since December.
After another weekend, after a 4th of July in the United States, the dollar does not set a leadership pattern. As the figures showed a reduction in demand for the U.S. currency from investors, the Forex market barely opened.
With volumes affected by the U.S. holiday and traders weighing on recent dollar data, as well as the growing number of Coronavirus cases, the Chinese yuan is setting the pace against this.
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Is the dollar no longer an option in the face of risk?
The dollar has been the currency most unanimously selected by investors since the world crisis broke out.
Given the risky environment, one risky investment that guaranteed good results was the dollar. But this seems to be changing.
The Yuan was on track on Monday to mark its best day against the Dollar since December. Investors were looking for riskier assets in the face of rising expectations of a strong Chinese economic recovery, after the country’s government declared new measures to be taken.
While the Dollar’s projections for the week following July 4th and the release of U.S. employment figures promised a weakening of the U.S. currency, its behavior in the Forex market was not surprising.
However, the Yuan’s gains have been rewarding to investors and analysts alike.
China’s leading stock index rose to its highest level in five years. As traders bet on a recovery of the local economy. This led the yuan in international prices to rise by 0.75% against the dollar to its highest level since March 18.
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The rise of the yuan
Monday’s trading followed a technical event of great importance for investors. This technical event was based on the fact that the 50-day moving average of the dollar index was trading below the 200-day moving average. This marks the potential for a sell-off.
The Chinese currency headed for its best day since Dec. 12 on Monday, after trading at 7,015 yuan per dollar. This was a surprise event for investors.
The Chinese yuan sets the pace thanks to the rise in the Asian country’s shares. This has been the great catalyst for the Chinese currency to once again cheer on investor interest.
This rise promises that the Chinese economy will soon improve and accelerate in its numbers. The Chinese government’s plan for the remaining half of 2020 is to recover from the global crisis.
The only problem is that China’s economy does not function under free market principles. This being a slight inconvenience for investors, and for their future in the Forex market.