Dollar Breakout Sends Chinese Yuan To Lowest On Record In Offshore Trading
Following the stronger than expected Manufacturing PMI print, the USD which has traded rangebound for much of the session, broke out to the upside once more, with the BBDXY trading above 1,207, and in the process pushing the USDJPY solidly above 104, a level which many fx strategists have suggests would lead to further upside momentum.
But the one pair everyone’s eyes are on this moment is the USDCNH, or the offshore Yuan, which moments ago just broke its all time low against the dollar, pushing the USDCNH to 6.7875, rising above the previous all-time high at 6.7850, reached on Sept. 2010
According to numerous FX strategist, the 6.80 level is seen as next resistance for pair with a breach potentially opening up path toward 6.83, a level last seen during 2008-10 financial crisis
So far the tumbling Yuan has not had the same repercussions as observed at the start of the Year when fears of Chinese devaluation and capital outflows sent global assets tumbling. Although a few more days of accelerated selling and concerns about China’s capital flows may once again return.
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