Yuan May Extend Loss on China’s Q3 GDP, Eyes on PBOC for Reference

USD/CNH Friday close.

FUNDAMENTAL FORECAST FOR CNH: Bearish

  • Chinese Q3 GDP and September gauges could add bearish momentum to the Yuan.
  • PBOC and China’s Finance Ministry may counter against extreme market sentiment.
  • China’s relations with the US and Japan add uncertainties to its international trade.

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USD/CNH RESUMES BEARISH TREND

The USD/CNH closed above a key psychological level of 6.90 on Friday; the PBOC’s reference rate was also set above the level, to 6.9120 on Friday. This opens room for the Yuan to head lower, with the USD/CNH climbing towards its record high of 6.9865 and the next critical psychological level, 7.0.

In the short-term, specifically next week, a few factors could determine Yuan pairs’ moves. China’s Gross Domestic Product (GDP) in the third quarter, PBOC’s guidance through common and uncommon tools, as well as developments in China’s relations with global partners.

CHINA’S Q3 GDP SEPTEMBER RETAIL SALES

The country’s economic growth is expected to

Article source: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/china_news/2018/10/12/Yuan-May-Extend-Loss-on-Chinas-Q3-GDP-Eyes-on-PBOC-for-Reference-.html