USD/CNH set for fresh breakout as growth concerns intensify
The USD/CNH is definitely worth watching as the recession narrative comes back to the forefront of investors' minds.
The renewed weakness in the yuan has been mirrored in the price action of things like copper and China's stock market, which fell overnight despite US and European indices rallying.
Fears over global growth intensified after China decided to postpone, without giving a reason, the release of its third quarter growth and industrial production figures that were due for publication this Wednesday.
Analysts think that economic growth there has slowed to a new three-decade low of 3.3% compared to 4.9% recorded in the same period a year ago. But the fact that China has delayed the release of the data does not look good and investors are worried that the world’s second largest economy may have performed even poorer than those expectations.
At the same time, the Fed has yet to indicate that it is ready to pivot to a more dovish stance. This is keeping the dollar bid.
The USD/CNH has, in response, started to move higher again. It looks like a breakout above the September high is on the cards, as rates continue to print bullish characteristics.
The renewed weakness in the yuan has been mirrored in the price action of things like copper and China's stock market, which fell overnight despite US and European indices rallying.
Fears over global growth intensified after China decided to postpone, without giving a reason, the release of its third quarter growth and industrial production figures that were due for publication this Wednesday.
Analysts think that economic growth there has slowed to a new three-decade low of 3.3% compared to 4.9% recorded in the same period a year ago. But the fact that China has delayed the release of the data does not look good and investors are worried that the world’s second largest economy may have performed even poorer than those expectations.
At the same time, the Fed has yet to indicate that it is ready to pivot to a more dovish stance. This is keeping the dollar bid.
The USD/CNH has, in response, started to move higher again. It looks like a breakout above the September high is on the cards, as rates continue to print bullish characteristics.
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