USD/CNH rallies to fresh highs as US Treasury calls China a currency manipulator

Secretary Mnuchin said today that China is a currency manipulator.
USD/CNH posted a high of 7.1147 from a low of 7.0912.

Ross J Burland FXStreet

USD/CNH has posted a fresh high in early Asia as the US Treasury calls China out as a currency manipulator. At the time of writing, USD/CNH is trading at 7.1141 having posted a high of 7.1147 from a low of 7.0912.

"China’s move to allow the yuan through 7.0 opens a potential new front in the trade war between the US and China, and will hit risk sentiment in Asia hard, with renewed portfolio outflows likely," analysts at ANZ Bank explained. "And China’s move to stop SOEs buying US agricultural products strikes right at Trump’s support base. Brace for ongoing volatility across all asset markets, including commodities."

US Treasury Secretary Mnuchin said today that China is a currency manipulator Via an official Treasury statement:

Will engage with the IMF to eliminate unfair competitive advantage by China's actions.
Says China's actions are a violation of China's G20 commitments to refrain from competitive devaluation.
Says continues to urge China to enhance the transparency of its exchange rate and reserve management operations and goals.

US Treasury to devalue the Dollar

It's interesting that he refers to China's G20 communique as it is likely that the US Treasury will move towards devaluing their own currency, it not just through pressuring the Federal Reserve to cut rates.

"It is possible, Washington may start to look at its own tools to weaken the dollar," analysts at ING Bak argued. "There have been no direct suggestions from the White House so far, but tweets regarding the need to match the currency manipulation of other trading partners have the market speculating over whether President Trump would instruct the US Treasury to sell dollars and buy FX in a unilateral intervention."

Looking around, this news has moved markets in thin trade following a bad day for risk appetite overnight. USD/JPY is 0.30% lower, AUD/JPY is getting kicked in the teeth and AUD crosses other than AUD/JPY are struggling. Gold is bid and making fresh highs as well.

USD/CNH levels

USD/CNH

Overview
Today last price	7.1138
Today Daily Change	0.1372
Today Daily Change %	1.97
Today daily open	6.9766

Trends
Daily SMA20	6.8914
Daily SMA50	6.9
Daily SMA100	6.8355
Daily SMA200	6.8341

Levels
Previous Daily High	6.9799
Previous Daily Low	6.931
Previous Weekly High	6.9799
Previous Weekly Low	6.8781
Previous Monthly High	6.9154
Previous Monthly Low	6.8166
Daily Fibonacci 38.2%	6.9612
Daily Fibonacci 61.8%	6.9497
Daily Pivot Point S1	6.9451
Daily Pivot Point S2	6.9137
Daily Pivot Point S3	6.8963
Daily Pivot Point R1	6.994
Daily Pivot Point R2	7.0114
Daily Pivot Point R3	7.0428

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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