If Stronger Than Expected Inflation, Consumption, And Jobs Didn't Lift The Greenback, What Will?

Chinese Yuan:  The dollar fell every day last week against the yuan for the first time since last June.  It was not a large move by foreign exchange standards, losing about 0.5%.  It was the second consecutive weekly drop in the greenback, which ended a six-week advance.   The greenback finished the week a little above CNY6.52, its lowest level since March 24.  Although China is on the US Treasury's currency watchlist, it seems to be broadly tracking the euro.  In fact, on a purely directional basis, the correlation between the euro and the yuan is near 0.88 on a rolling 60-day basis, the upper end of where it has been since the beginning of 2019.  The offshore yuan continues to trade slightly weaker than the onshore yuan.  The CNY6.50-area marks the middle of this year's range, and below it, there is congestion around CNY6.48.  The CNY6.54-CNY6.56 band offers a nearby cap (CYB).  

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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