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The yuan's recent rise against the dollar reflected dollar weakness against the euro rather than Chinese-specific factors, since the yuan is managed against a currency basket. The article argues the yuan's movements are driven by the dollar rather than China risk.
The move signals that dollar strength, not Chinese fundamentals, drives yuan-denominated import costs, so a softer dollar tends to support dollar-priced commodities. Market participants should track the dollar index more than yuan-specific news.
asiatimes.comDavid P. GoldmanAug 22, 2018After 359 past neutral macro events, US Dollar (Broad) moved a median -0.0% over 5 sessions (49% higher; middle half -0.4% to +0.4%), and -0.1% over 20.
After 169 past neutral macro events, Chinese Yuan (CNY per USD) moved a median +0.0% over 5 sessions (50% higher; middle half -0.3% to +0.2%), and -0.0% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
