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The Chinese yuan hit a 10-year low of 6.9670 per dollar this week, down 11 percent this year on trade tensions, slower growth and a narrowing interest rate gap with the US. Markets are focused on whether the currency will breach the psychological 7 level.
A break beyond 7 would raise the dollar cost of Chinese imports, weighing on Chinese demand for US soybeans and feed ingredients. The explainer describes existing conditions rather than a new shock.
caixinglobal.comKe BailiNov 1, 2018After 398 past bullish macro events, Chinese Yuan (CNY per USD) moved a median +0.0% over 5 sessions (56% higher; middle half -0.3% to +0.5%), and +0.0% over 20.
After 273 past bearish macro events, Soybeans moved a median -0.4% over 5 sessions (44% higher; middle half -2.4% to +1.4%), and -0.5% 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.
