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USD/CNH: BofA’s Caution, JPM’s WarningsUSD/CNH: BofA’s Caution, JPM’s Warnings Bank of America (BofA) has expressed caution about betting against the US dollar in the face of recent improvements in sentiment towards China's economic policy stimulus. Recent policy actions by China have sparked optimism, leading to a weakening of the USD. However, BofA advises against making hasty financial moves based on these developments alone. BofA believes that the effectiveness of Chinese Economic policies in stimulating significant new economic activity remains uncertain. Investors are encouraged to wait for more definitive signs of a sustained recovery in China's credit and property sectors before making significant currency moves. Just last month, BofA expressed a bearish outlook on several Asian currencies, including the Chinese yuan, South Korean won, Taiwan dollar, Thai baht, and Vietnamese dong. BofA anticipated sustained depreciation pressures on the yuan into the second half of the year due to several factors particularly due to the delayed easing by the Federal Reserve. On the other side, Jamie Dimon, the CEO of JPMorgan Chase, has been continuing his warnings at the JPMorgan Global China Summit in Shanghai. Dimon suggested that the chance of stagflation in the US—a period of stagnant economic growth combined with high inflation—is higher than most people think. Last week, he did not rule out the possibility of a hard landing for the US economy.
by BlackBull_Markets
Ascending Triangle Points Towards Yuan Devaluation This SummerNote: the technical indicators show a TTM squeeze ready on EVERY TF except Monthly, which is about to happen shortly by this summer - which means a massive move will happen. BOJ will blow up this summer and will devalue against the dollar forcing China to devalue to stay export competitive. I see a 50% devaluation - which will have the opposite effect on everyone else. If China devalues, that means they invite inflation into their economy, which forces deflation throughout the whole world. This will push up the dollar and blow up everyone else's currency. I see the dollar TVC:DXY going to 140-160+ before it too blows up. Of course this implosion will be blamed on some external false flag event - while the FED trots out CBDC's via DigitalID anchored to social credit scores that allows the FED to effectively use negative interest rates via social credit scores and time value of the credits. Gold and silver really won't matter because people will be looking for food.
Long
by EmptyEternity
Divergence here, divergence thereFundamentals & Sentiment USD: The sentiment has been bullish for a while as US CPI remains sticky. As the dollar gained strength. However, it became overpopulated with buyers, as evident from CFTC reports. So, it should take some trigger for those buyers to start covering their longs - a good potential for dollar downside. The CESI differential for USDCNH has been forming a decent divergence since February. CNH: The economic data came out pretty mixed this morning. It seems the market focused more on slacking Industrial Production YoY and Retail Sales YoY as ChinaA50 closed the session with a sharp recovery, viewing the miss in data as another reason for stimulus from PBoC. Technical & Other - According to seasonals DXY should stay flat for the next 3 weeks Setup: S(RTF) Setup timeframe: 4h Trigger: 15m Medium-term: Sideways Long-term: Uptrend Min target: range boundary Risk: 0.14% (0.5R<) Entry: Market
Short
by Cherry94
5
🇺🇸 President Joe Biden’s Bearish Remarks on the USD vs. CNY 🇨 Ladies and gentlemen, my fellow Americans, and all you Zoomers out there, gather 'round! Uncle Joe’s got some thoughts about our greenbacks and those sneaky Chinese Yuan. Buckle up, because we’re diving into the financial rabbit hole. 🐇 1. “The Dollar’s Got Swagger” You know, folks, the U.S. dollar has been strutting its stuff for centuries. It’s like that cool kid in high school who always had the latest sneakers and a killer mixtape. Well, guess what? The dollar’s still got swagger. 💸 2. “Yuan? More Like Yawn!” Now, let’s talk about the Chinese Yuan. Sure, it’s got pandas on its bills, but pandas don’t pay the rent, my friends. The Yuan’s like that kid who shows up to the party with a veggie platter. Nice try, but we’re here for the pizza. 🍕 3. “Quantitative Easing? Nah, We’re on a Diet!” Our Federal Reserve’s been flexing its muscles, printing money like it’s going out of style. But guess what? We’re not on a doughnut binge. We’re on a financial diet. No more QE buffets. 🍩 4. “Trade Wars? More Like Pillow Fights!” China and the U.S. have been duking it out in trade wars. But honestly, it’s like watching two toddlers in superhero costumes pillow-fighting. Cute, but not exactly world-changing. 🛌 5. “0.11 CNY/USD? That’s a Bargain!” So, rumor has it the yuan’s gonna dump to 0.11 CNY/USD. Well, let me tell you, that’s practically a yard sale price. Sell one, get one free! 🛒 6. “Zoomers, HODL Your Avocado Toast!” To my Zoomer pals: Forget avocado toast for a sec. HODL those dollars like they’re vintage Pokémon cards. Trust me, when the Yuan’s doing the cha-cha, you’ll thank me. 🥑💰 7. “Crypto? Nah, I Prefer Monopoly Money!” And don’t get me started on crypto. It’s like playing Monopoly with invisible cash. Pass Go, collect Bitcoin. But give me that real green paper any day. 💵 In conclusion, my fellow Americans, let’s keep our eyes on the prize. The dollar’s been through wars, recessions, and disco fever. It ain’t backing down. As for the Yuan, well, pandas are cute, but they won’t save your retirement fund. Stay woke, stay dollar-wise, and remember: In Joe we trust (and a little bit of Ben Franklin). 🇺🇸💪 Disclaimer: This post is purely fictional and for entertainment purposes. No actual financial advice here, folks. Consult your financial advisor, not Uncle Joe. 🎩🤝
Short
by TheTraderrr
A stronger yuan could spell trouble for USD/JPYA downtrend has formed on USD/CNH since it failed to retest the 2022 high in September. Since then, a lower high, aggressive selloff and a bearish continuation pattern (rising wedge) has formed on the daily chart. The rising wedge projects a downside target towards the cycle lows ~7.1. If the yuan continues to depreciated (lower USD/CNH), it could prompt other Asian currencies such as the Japanese yen to also depreciate, in order to remain competitive with trade. And as USD/JPY is approaching 152 - a level it failed to test due to BOJ intervention (and subsequent concerns of another intervention) - there's a reasonable chance that USD/JPY may struggle to break above 152. For now, USD/CNH looks ripe for a move lower given the double top / rising wedge around the 50% retracement level, and bearish momentum picking up. Bears could have a stop above the cycle highs and target the lows around 7.1. But if the Fed begin to drop dovish clues further out, it could also break below 7.1 and head for 7.0.
Short
by CityIndex
The USD Strength vs the IMF's SDRThe USD Strength Indicator's relationship with the SDR basket is foundational to understanding global currency dynamics. Since the SDR comprises major currencies like the USD, Euro, Yuan, Yen, and Pound, the indicator's assessment of USD's performance against these currencies offers direct insights into its comparative value. This evaluation helps gauge the USD's global economic standing, influencing international finance, trade decisions, and the IMF's monetary strategies. It's a critical tool for analyzing shifts in currency power and their broader economic implications.
CRYPTO:BTCUSD
by CryptoPulseAnalyzer
Currency scuffleAs you can see we prepared update for the currency agenda, we have added gd, jpy, rub, and inr to the fuse, as you can see fibonacci cycles stayed the same in the anbsence. We think or at least clearly see on a chart that rub was the most profitable currency available. In the later arrivals we will try to discover most profitable assets nominated in rubles and compare them to assets in other curencies. Feel free to read, analyse, comment and enjoy the party.
by UnknownUnicorn462803
1
USD/CNH looks set for its next leg higherUSD/CNH remains in a soliud uptrend on the daily chart and, after consolidating around the June highs and forming a bullish hammer at 7.25, the swing low appears to be in. A bullish range expansion day broke the bearish resistance line, and bulls could seek to enter upon any pullbacks towards yesterday’s low for a tigher long entry. The bias remians bullish above Last weej’s hammer low, and we could now be heade for 7.35 or the 2022 high. A small bulish hammer has also formed on the 1-hour chart. A conservative target projected from the recent leg higher suggests 7.32 for bulls, whilst if we use the run up from 7.27 it projects a target atound 7.34.
Long
by CityIndex
CAN BRICS Gold Standard Threat USD in Nearest Months?Last month there were several claims, and rumors, that BRICS will back its united future currency by gold. The return of gold as money has been heavily discussed by gold bugs for about the last 10 years. Below I provided their general thoughts: The gold bugs nailed that China and Russia have significantly boosted their gold reserves. The countries conduct independent geopolitical policy that contradicts the West. Dollar days are over. The White House sanction policy which escalated last 2 years combined with permanent US debt growth and dollar depreciation make it impossible to use USD in global trade, global investments, etc. The world needs to return to gold, because the last 50 years after Nixon suspended USD convertibility to gold, have shown that fiat is the pyramid of growing debt and continuous inflation. In other words, claims about the BRICS gold standard perfectly fit these gold bugs' dreams. During the year there were proposals for BRICS membership, from Algeria, Saudi Arabia, the UAE, and many other developing countries from different regions. It is hilarious for me, that the acronym BRICS was coined by the British economist Jim O'Neill from Goldman Sachs. Today countries that oppose the West or conduct independent from the West policy, use the English acronym BRICS to describe themselves. West created BRICS (not only the acronym, but investments, favorable trade laws, etc.), and BRICS opposes the West. I see five internal pillars to establish gold-backed supranational currency. You need a united bank that will manage the currency gold reserves,i.e. the funds for the currency economic strength, that usually measured by GDP to compete with fiat and unfriendly regulations from non-block countries established robust relations in international trade between members or potential members supranational and national legislation that will regulate the currency without undermining national currencies, FX markets, monetary policy, etc. Several years ago BRICS established the supranational bank New Development Bank (the NDB). Possibly, it may become the alliance central bank and the issuer of gold-backed currency. Its total equity in the 1Q of 2023 was equal to 11.17 billion USD. It is big enough for private institutions from emerging markets, but not enough if you pretend to alternate the American dollar. The bank applies USD as its reporting currency. It makes sense if you do not oppose the dollar hegemony. According to the bank investor fact sheet, the bank is a bond market participant with high credit ratings, that regularly issues bonds in USD (again, hated dollar) and currencies of the members (CNY, RUB, ZAR bond programmes). The bank has adopted the Contingent Reserve Arrangement (CRA). It is a framework to provide liquidity during financial stress. To my knowledge, it wasn't used in February 2022- March 2023 when the Russian financial system and especially the ruble were under enormous pressure . Russia closed its markets and imposed currency control measures to cool off unfavorable trends. It highlights how uncoordinated and unhelpful BRICS is. One excuse may exist if other members offered Russia to use the CRA and it refused. You can say, that the NDB can easily increase its 11.17 billion USD equity using the gold reserves of the union. Let's move to gold holdings. The first pane, under the continuous gold futures price, shows BRICS gold reserves performance according to the World Gold Council (WGC). At the end of Q1 2023 the combined reserves exceed 5444 (5444.53) tonnes or 175.045 million oz. It is noticeably higher than all world gold demand, which was estimated by the WGC at 4742 tonnes in 2022. London Gold fix was 1963 USD/oz on July 21. Applying the price, the gold reserves of BRICS surpass 343.6 billion USD . The major share is provided by Russia and China. Russia held 2326 tonnes (42.72% of the BRICS reserves), and China possessed 2068 tonnes or 37.98% of reserves. It was followed by India with 794.6 tonnes or 14.5%. Brazil and South Africa held almost the same amount of yellow shinning metal: 129.6 tonnes (2.38%), and 125 tonnes (2.3%) respectively. It is the first striking difference that members have an uneven metal distribution that can undermine the future of a possible united monetary union . However, not necessarily countries would invest all their gold to create the gold-backed currency. Another drastic difference is in their GDP size . The merged GDP of the block was about 25.91 trillion USD in 2022 . China had 17.8 trillion USD, significantly exceeding others or accounting for 68.7% of the alliance. While it held 37.98% of all group gold reserves. The next was India with 3.3 trillion USD providing 12.74% to the union's GDP. Its GDP share is close to its gold reserves share of 14.5%. The third was Russia with 8.6% GDP share or 2.24 trillion USD. [ Important to note that Russian GDP dollar estimation was hampered by the overpriced ruble in 2022. It was caused by Western sanctions on Russian imports, while Russia was receiving plenty of dollars for its commodities. That finally ballooned the country's current account surplus to the historical highs being a magical pill of ruble strength. ]. It is not the big GDP share, while the country's gold reserves proportion was 47.7%. Russia was followed by Brazil with a GDP equal to 1.92 trillion USD contributing 7.4% to the merged GDP. Brazil's GDP stake exceeded its metal reserves. The South African GDP was 0.4 billion USD providing 1.54% of GDP. The GDP share is slightly below the country's metal stake in BRICS. The economic strength of members does not equal countries' gold reserve s. Only India and South Africa had close estimations of share in GDP and gold inventory. The inclusion of export data in analysis can't show all the depth of international trade between the members, but quantitative figures will uncover the trade patterns. Not sure that export data on the 4th pane has equal periodicity, but I have to apply that all 5 countries have the same monthly periodicity. The summarized monthly exports are about 393 billion USD. The figures have some seasonality, more volatile than annual GDP and quarterly gold funds data, but their volatility will not wreck the analysis and the general situation. China is the leader with 72.5% in the group exports. Russia is the second with 9.1%. India is sat next to it with 8.39%. Brazil is close too, with 7.63%. As in the previous rankings, the last one is the South African Republic with a 2.3% export share in the related group. There are discrepancies between export share, GDP, and gold funds among the block. Again the South Africa figures of exports close to its gold reserves and GDP contribution, while for others they do not match. Among the total export figures, we should take into account with whom the countries trade and what they trade. The primary buyers of Chinese exports are the USA, Japan, South Korea, and the EU or the West which use USD and partly EUR in their international contracts. The main export partner of Russia, Brazil, and South Africa is China . But the main export partner of India is the USA. Nothing is surprising here, the predominant goods in Brazilian, Russian, and South African exports are commodities. The main world factory of consumer and industrial goods is China which buys commodities and consumes commodities to make the final goods. India is in the middle, it exports some goods, like pharmaceutical products, but the majority of the exports are commodities or refined commodities (like petroleum). Worth noting that has happened after the West imposed sanctions on Russia. Russia has decreased its dependency on the West and extraordinarily increased market share in non-West countries, like India, Turkey, and China. They say Russia supplies its commodities with heavy discounts. What currency do Russia and its non-western partners use? According to Reuters' article published on May 4, 2023, between Russia and India most of the transactions happened in the American dollar , other parts were made in Indian rupees, the UAE dirham (AED). Because Russia couldn't spend rupees, the two countries suspended their rupees trade. Russia preferred CNY and part of transactions were routed via China. It says a lot about BRICS partners and their bilateral trade, transactions, and payment currencies. Even sanctioned Russia was ready to receive the dollar (thanks to a few exemptions provided for USD payments to Russian commodities), to receive AED, which is pegged to USD (quasi-dollar) and Chinese yuan. China is the main importer of Russia, so it is comfortable for Russia to receive yuan for its exported commodities and spend it on its imports. Why single supranational currency can be created after all the mentioned facts? According to the Bank of Russia statistics, the yuan share in Russian exports payment was about 25% in May 2023, compared with the combined USD and EUR share of about 33%. About 30% of Russian imports were paid in Chinese yuan compared with 33%-34% of payments in USD and EUR. Even being under sanctions and having the necessity to go away from the USD and EUR, Russia still significantly uses them. Having 2326 tonnes of gold and being #1 in the gold reserves ranking, Russia hasn't used it in its international trade. There are no official statistics that can prove using gold in Russian international trade. Why not use gold? Do the Western sanctions on Russian gold transactions undermine the Russian ability to use its gold in foreign trade? If the answer is yes, then for me it is hard to believe that not only gold-backed currency can be established, but also play an important role in the international trade between members of BRICS. It can be the BICS gold standard. Yuan-gold back standard, anything without Russia. International trade is also about the trade of goods and services and international investments. The topics are out of the scope of my analysis. Of note, the majority of international reserves of these countries are invested in USD-denominated assets, predominantly bonds . I believe the most diverse is Russia which has invested its reserves in CNY, AUD, CAD, CHF, and GBP. All Russian reserves, except CNY-denominated, are under sanctions now. Will gold-backed BRICS currency have the assets nominated in the gold-backed units allowing economic agents to earn interest? At the minimum, it should provide opportunities to store value, be volatile as the American dollar or less, and be liquid to be exchanged in fiat and goods. Finalizing 1,2,3,4, I want to add, that only current members were analyzed. If new members join, it will change amounts, countries share and their positions in gold funds, GDP, and international trade, and likely will demand to increase the NDB equity letting new members in. I can imagine that the countries can adopt supranational and national legislation to establish gold-backed currency. But I can't imagine how many problems it will create. How it will work with their national currencies? How it will affect taxation? If it is backed by gold, then its currency rate will mimic the gold price. Can they issue debt in the new gold-backed currency? It will be like a creation of the European Union and its Eurozone with its fiat Euro. It can't work without a lot of frameworks and treaties. As Europe shows, treaties are not followed by its member states. If BRICS doesn't have aims to use their unborn currency in trade between private companies, and individuals, it will be like the SDR of the IMF. If exporter/importer (no matter, whether an individual or a company) can't use the currency, it will not outshine dollar transactions. Just a new measure of calculation of debt and assets for its members. The internal factors were analyzed. There is one important external one. To protect the new currency, and develop its popularity to substitute the dollar you need to build trust in the currency among others. On the bottom of the superchart, corruption ranks show. The least corrupt has first place among all other countries. The ranking compares countries with each other. You can argue that it is biased data. Yes, it can be. But I believe, it shows the general scene. China the best member-state, ranks 65th, South Africa is on 72nd place, India on the 85th, Brazil on 94th and Russia takes 137th place. With these figures, I doubt that the supposed currency can be confidently used by the private sector and will be trusted by the private sector and non-member states. All in all, there are a lot of contradictions in the creation of gold-backed currency, the USD substitution. If a country wants to use gold right now in international trade, it can do it, if its counterparty agrees, and there is no need to create the supranational monetary surrogate that is backed by gold. The current situation shows that countries are more likely to continue using USD, a national currency in international trade than create a confident and useful gold-backed currency. Creation of a single currency can take years, countries will need time to adopt their laws and monetary policy, and business habits to use this currency. It may be a smooth long-term process to create the gold-backed currency. Even the situation with Russia, when the country needs to stop using 'poisonous' USD, has shown their economic agents still pay and receive USD. In my opinion, that it is more probable, they would create a yuan-backed CBDC, than the BRICS gold-backed single monetary unit that will threaten the dollar. Favorable rumors and estimations from experts could buoy gold prices until the end of the BRICS summit (August 24, 2023). On the technical side, gold seems weak to breakout the 2100 USD/oz resistance in the nearest month. Presumably, it would float between 1900 and 2100 USD/oz.
COMEX:GC1!
by Nikita_Kalinin
USDCNH - Testing new highsThe trajectory of the USDCNH is a burning question as it approaches the highs witnessed in November 2022. Recent weeks have seen China's economic robustness wane, and as a result, attempts by its central bank to ease the situation have led to a weakening of the CNH. This dynamic becomes clearer when considering the interest rate differential between China and other nations. In contrast to the U.S., which is on a rate-hiking journey, China's recent interest rate reductions have amplified the rate gap between the two nations. Overlaying the USDCNH currency pair with this interest rate differential reveals a clear correlation: as the differential grows, the USDCNH rises in tandem, driven by the depreciating CNH against the USD. A possible factor behind this movement is the "carry trade", where investors borrow in CNH at low-interest rates to invest in higher-yielding assets. This phenomenon isn't unique to the USDCNH. Japan, another country that has adopted an easing stance, exhibits similar patterns. As the rate differential between the U.S. and Japan expands, so does the USDJPY currency pair. Examining the dollar independently, there's potential for an upward surge. It's currently trading close to the top edge of a descending channel, with the RSI indicating it isn't oversold yet. With the Jackson Hole Symposium slated for later this week, all eyes and ears will be sensitive to any unexpectedly hawkish remarks from the Federal Reserve Chair, which could lead to another surge in the dollar, driving the USDCNH higher. On the one hand, the dollar has the potential to break higher based on technical, on the other hand, the PBOC is likely to ease policy further as it deals with the economic fallout of its property sector. Considering the above in an eventful week when the Jackson Hole Symposium is to be held, we see opportunity for a risk managed long position in the USDCNH at the current level of 7.3126 with a tight stop at 7.245 and take profit at 7.460. Each 0.0001 per USD increment in the USDCNH future is equal to 10 CNH. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com
CME:CNH1!Long
by inspirante
$CNIRYY - Deflationary CPI- While ECONOMICS:USIRYY numbers remain inflationary, having the latest increase to 3.2% on August 10th, on the other side of the World from the second Global Superpower, ECONOMICS:CNIRYY came Deflationary at negative 0.3% on 9'th of August, just a day prior to numbers of ECONOMICS:USIRYY . Note that The Head of Federal Reserve, our pal Jerome Powell, stated that Feds do not see Inflation ECONOMICS:USIRYY coming down to their norm target of 2% CPI by 2025. Jerome still believes on a 'Soft Landing'.. How about another Joke, Powell !?
ECONOMICS:CNIRYY
by Mr_J__fx
Using the News to better prepare for your day-tradingI'm not much for getting into the politics of things but I did see a news release this morning that discusses how Chinese banks are offloading a lot of their U.S. dollar holdings in relation to raise the value of the Yuan. Now you might wonder how can this affect American markets or how does it affect the US dollar, and in the article below I'll give you some insight into that. For me the details below reflect what I should be expecting from the New York Stock exchange which is what I'll be trading later today. This is how I prepare for my morning and how you should probably do the same. If Chinese Banks offload much of their US Dollar Holdings, how does that effect the US? Impact on the US Dollar: When Chinese banks offload a significant portion of their US Dollar holdings, it means there will be an increased supply of US Dollars in the foreign exchange market. With more supply and less demand, the value of the US Dollar would likely decrease relative to other currencies. In simple terms, the US Dollar may depreciate in value. And how does it effect the New York Stock Exchange? Impact on the NY Stock Exchange: A weaker US Dollar can have both positive and negative effects on the NYSE. On the positive side, a weaker US Dollar can boost exports for US companies, as their products and services become more competitive in international markets. This can lead to increased revenues and potentially higher stock prices for US exporters. The Counterpart On the negative side, a weaker US Dollar can lead to higher import costs, as it becomes more expensive for US companies to purchase goods and services from foreign countries. This could put pressure on their profit margins and could negatively affect stock prices for companies heavily reliant on imports.
by CoffeeshopCrypto
6
Nikkei break out? - China's JapanificationThe recent Nikkei rally is bringing it ever closer to that "magical" 30,000 level which it hasn't touched since the late '80s collapse. IFF a breakout occurs, expect a collapse in all XYZ/JPY pairs - since, true to form, every equity/hedge fund in the world is expected to pile in. Internal Chinese (export/import) numbers are showing a fair pick up in exports - post Covid - BUT a very anemic internal demand, with import numbers steadily surprising to the down-side (by a lot!). Simultaneously Japanese heavy industry is racking up some solid numbers lately, especially in regard to steel, automobile and electronic components. All of this is fueled by an abating chip shortage, giving world wide car production a boost. E.g. Watch the Nikkei price action and fully expect a blinding YEN rally should that 30,000 level get blown away!
OSE:NK2251!Long
by Nemo_Confidat
Does Fed raise rates to weaken China yuan? USDCNHI wanted to take a moment to share some exciting news with you all about the USDCNH (US dollar and Chinese yuan) currency pair. As many of you may know, the Chinese economy has been showing signs of weakness lately, directly impacting the yuan's value. The Federal Reserve has also raised interest rates, weakening the yuan against the US dollar. But what does this mean for us as forex traders? It means there is an excellent opportunity to long the USDCNH and potentially make some serious profits. So, I encourage you to take advantage of this situation and consider going long on the USDCNH. With the yuan's continued weakness and the Fed's interest rate hikes, there's a good chance this currency pair will continue to rise. Don't miss out on this opportunity to make some serious gains. Start trading the USDCNH today and take advantage of the current market conditions.
Long
by bryandowningqln
USD JPY - FUNDAMENTAL ANALYSISYen Undervalued, Yuan to Lose Ground Danske Bank continues to expect that the Bank of Japan will tighten monetary policy this year, although the timing remains very uncertain. While a key argument against the Euro is that the currency is overvalued, it considers that the Japanese currency is substantially undervalued. According to Danske; “Overall, USD/JPY seems fundamentally overvalued and combined with potential monetary policy tightening; we expect the cross to drop below 130 on a 6-12M horizon. If inflationary pressures in Japan continue to persist, it will increasingly build pressure on the ultra-dovish stance that the BoJ has. Danske expects the Chinese yuan will lose ground due to broad dollar gains. A weaker Chinese currency would also act as a barrier to Euro gains.
Short
by thunderpips
DXY: BRICS Creating New Reserve CurrencyHi Traders, Investors and Speculators of the Charts 📈📉 Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. For the past eight decades, the U.S. dollar has been the dominant global currency following the Second World War. It has been widely accepted worldwide, with only a few exceptions, and is commonly recognized by the image of Andrew Jackson and the seal of the U.S. Treasury, making it the most recognizable export of the United States. The U.S. dollar became the reserve currency of the world following the Second World War, mainly because the United States was the dominant global economic and military power at the time. The Bretton Woods Agreement of 1944 also played a crucial role in establishing the dollar's role as the world's reserve currency. Under this agreement, other countries agreed to peg their currencies to the U.S. dollar, which was backed by gold. This made the U.S. dollar a stable and reliable currency for international transactions, leading to its widespread acceptance as a reserve currency. Additionally, the U.S. had a large trade surplus, making it easier for other countries to hold dollars as reserves to pay for U.S. goods and services. The dominance of the U.S. dollar as the world's reserve currency has been a source of both admiration and resentment among other countries and superpowers. Many countries have benefited from the stability and liquidity that the U.S. dollar provides as a reserve currency, allowing them to conduct international trade and investments with greater ease. However, some countries have also experienced the negative effects of dollar dominance, such as the risk of currency fluctuations and the potential for U.S. monetary policy decisions to have spillover effects on their own economies. The U.S. dollar was not only commonly used in international transactions but also widely held as a long-term store of value across the globe. Central banks worldwide held more U.S. dollars than any other currency. This resulted in low borrowing costs for Americans , which allowed middle-class people to buy homes. Furthermore, the U.S. government was able to incur significant debts without apparent consequences due to the dollar's global dominance. Americans may not have been aware of this situation, but it had a favorable impact on their daily lives. Occasionally, the Congress discussed the debt ceiling, but it seemed like an abstract topic that most people did not care about since America controlled the global reserve currency and could print U.S. dollars. This privilege made money cheap, and Americans enjoyed benefits that were not available to other countries. However, the thought of losing this dominance was too terrible to contemplate, and concerns began to arise around the time the Russian military entered Ukraine about a year ago. The consequences of such a loss would be dire, and it was a worrisome issue. The Russian military's invasion of Ukraine was destabilizing, as wars typically are. However, it was the West's reaction to the invasion that raised concerns. U.S. policymakers, led by USA President Joe Biden and supported by Republican senators, seemed intent on not only toppling the Russian government but also disrupting the post-World War II economic order that had benefitted the U.S. for decades. The sanctions weren't expected to harm the U.S. economy more than the Russian economy. Russia's economy is not heavily reliant on financial services but on natural resources such as oil, gas, iron, and coal . Despite the sanctions imposed on Russia, its Ruble remains stable against the US dollar, which suggests that the sanctions did not have a significant long-term impact on Russia's economy. The seizure of Russia's central bank's dollar reserves was intended to collapse Russia's credit system and cause bank runs, but it didn't happen. The USA did not consider the dangers when using the dollar, the sign of security and unity, as a weapon. The result of this is unsurprising, many countries lost confidence in the dollar. And so, Russia, Brazil, Pakistan, India, Malaysia, France, China, and Saudi Arabia are conducting business in currencies other than the US dollar, such as the Chinese currency Yuan. This is happening at a fast pace and shutting out the US dollar, which is losing trust from other countries due to its use as a weapon and excessive printing, leading to inflation and currency devaluation. 💭Final Thoughts 💭 We look to history to speculate on the future. As the saying goes, history repeats itself. During the First World War, the German government borrowed heavily to finance the war effort, resulting in a significant increase in national debt. The government continued to print money to pay for its expenses, which led to hyperinflation and a collapse of the German economy in the early 1920s. In 1923, the German mark was practically worthless, and people had to carry wheelbarrows of money to buy basic goods. This hyperinflation had a devastating effect on the German people, wiping out their savings and pensions and causing widespread poverty and social unrest. The situation stabilized when the German government introduced a new currency, the Rentenmark, backed by mortgages on agricultural and industrial land which restored some degree of confidence in the currency. The German government basically inflated their currency due to excessive debt accumulated from war. The United States has a similar history with wars, relying on the reserve currency status to recover from the economic damage of these wars. However, considering the large economical impact of Russia and BRICS's contribution the the economy, it could be catastrophic due to the current state of the US economy. The BRICS nations (Brazil, Russia, India, China, and South Africa) are exploring the possibility of creating a new reserve currency as an alternative to the US dollar-dominated international financial system. The proposal was discussed at a virtual meeting of the BRICS finance ministers and central bank governors, with a goal to decrease the dependency on the US dollar and increase trade between member countries. However, no specific details were provided yet about the potential reserve currency. _______________________ 📢 Show us some LOVE 🧡 Follow for daily updates and trade ideas on Crypto , Stocks , Forex and Commodities 💎 We thank you for your support ! CryptoCheck
TVC:DXYShort
by CryptoCheck-
53
The Rise (mean reversion) of the Russian RubleThe Russian Ruble is represented on an inverted, logarithmic scale vs.the G/S & G7 currency basket, where a rise in price levels on the chart indicates an irise in the Ruble. For all the widely known reasons the Russian Ruble remains a remarkably accurate yard stick of the march of imperialism and the states of various hegemonies ("Globalization", in short) for the past 20 years. The Russian Federation maintains 0 (zero) debt , a positive account balance, combined with what is most likely the largest horde of gold & foreign reserves outside (and insulated from) Western jurisdictions, making the currency remarkably stable - despite all the propaganda and wishful thinking to the contrary -, for the past two decades. (It has proven itself far more stable than other means or stores of value across the G-7. This is clearly a thorn in the side of others' continued imperialist aspirations.) These facts simply highlight the present (and potential future) opportunity, wherein any significant deviation from the Median likely represents a significant trading opportunity. LONG p.s. On the contrary, the current vogue of wide spread and simple-minded speculations, heralding the rise of China and hence, the Yuan/Remninbi as the new, potentially global reserve currency, are so fundamentally flawed that entire books have addressed the topic as of late, examining it in great detail and with accuracy. I.e., a rapidly collapsing Chinese population, quickly followed by de-industralization and de-urbanization a stable, global reserve currency does not make! - Among other, inherently disqualifying factors.
FXOPEN:XAUUSDLong
by Nemo_Confidat