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The yuan weakened to a three-week low against the dollar after the Federal Reserve brought forward its projection for interest rate hikes into 2023. The PBOC set its midpoint fix weaker than expected, and the dollar index rose.
A firmer dollar and the Fed's hawkish shift tend to pressure dollar-priced commodities, and a weaker yuan makes Chinese buyers less willing to pay up for U.S. feed grains and meal.
brecorder.comReutersJun 17, 2021After 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 2,356 past bullish macro events, US Dollar (Broad) moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% 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.
The hawkish Fed projection of rate hikes in 2023 lifted the dollar and pushed the yuan to a three-week low on the day of the move, directly explaining the CNY/USD jump.
The Fed's hawkish projection of rate hikes in 2023 lifted the dollar and pushed the yuan to a three-week low, which is the main driver of the CNY per USD rise.
