- Yuan slides to multi-month lows on escalating US-China tussle.
- The US threatens to impose sanctions on China if the latter passes the controversial Hong Kong bill.
- India-China border standoff is likely adding to bearish pressures around yuan.
China's Yuan is taking a hit on Wednesday amid the dragon nation's rising tensions with the US and India.
The USD/CNH pair is trading at 7.1565 at press time, the highest level since early September 2019, representing a 0.30% gain on the day.
China's plan to impose a national security law on Hong Kong has become the latest front in soaring tensions between Washington and Beijing. The US lawmakers and other western nations are of the opinion that the law if implemented, would be a death knell for Hong Kong's autonomy.
US Senator Rubio tweeted late Wednesday that the US would be left with no option but to impose sanctions on China if it passes the controversial bill. It is worth noting that the two nations are also embroiled in a war of words over the origin of the coronavirus and China's handling of the pandemic.
Further, India-China border tensions have escalated in the past 24 hours with Chinese President asking the military to scale up the battle preparedness, visualizing the worst-case scenarios.
The yuan's recent decline from 7.10 per US dollar could also be associated with the People's Bank of China's (PBOC) willingness to tolerate currency weakness. On Friday, the central bank put the yuan fixing at 7.1209 per dollar, the weakest since 2008.
The central bank strengthened the fixing to 7.1092 earlier today. So far, however, that move has failed to stall the slide in the currency.
- R3 7.1515
- R2 7.1448
- R1 7.14
- PP 7.1333
- S1 7.1285
- S2 7.1218
- S3 7.117
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
EUR/USD stays below 1.0900 as Q1 comes to an end
EUR/USD has lost its traction and declined below 1.0900 in the American session on Friday. Quarter-end flows seem to be allowing the US Dollar find some demand but the risk-positive market environment seems to be limiting the pair's downside ahead of the weekend.
GBP/USD trades below 1.2400, looks to post weekly gains
GBP/USD has edged lower after having tested 1.2400 earlier in the day but remains on track to end the third straight week in positive territory. The upbeat mood remains intact after soft PCE inflation data from the US, making it difficult for the US Dollar to continue to gather strength.
Gold tries to stabilize near $1,980 following earlier spike
Gold price has returned to the $1,980 area following a spike above $1,987 with the initial reaction to lower-than-expected PCE inflation figures from the US. Meanwhile, the benchmark 10-year US Treasury bond yield stays in the red near 3.5%, providing support to XAU/USD.
Will Dogecoin price pull an XRP and rally 60% next week?
Dogecoin price has been in a tight range bound movement since November 22. The recent recovery above the range low looks promising and hints at an explosive move for next week.
Week ahead – Nonfarm payrolls to set the tone for US dollar
With the banking turmoil receding, market participants will turn their attention back to economic releases. The spotlight will fall on the US employment report.