What Moves CNY??

CNY moves are highly influenced by the Central Bank of the People’s Republic of China Monetary and Fiscal Policy.

China is largely dependent on international trade. So trade balance is one of the major tools traders and investors look at to gauge its economic performance.

There are several factors that move the Chinese Yuan but we shall discuss the major one

ECONOMIC data that moves CNY

Major economic data that moves CNY include;

1. Gross Domestic Product GDP

 Gross domestic product data release serves as a major economic news in china. This greatly moves CNY

This is because it shows the overall performance of the country’s economy which reflects the strength of the CNY.

For instance,

when GDP is positive, it reflects growth in the china’s economy. This attracts more investors and increases more demand for the CNY hence increase in its value.

On contrary,

if GDP is negative on the report, it reflects a fall in china’s economic growth. This is of course bad news to investors and may cause a fall in the CNY value.

2. Consumer Price Index CPI

CPI measures changes in prices of china’s goods and services at a general price level for a given period of time.

The PBoC uses CPI to track price changes of different goods and services and to measure consumer expenditure as away of monitoring inflation levels.

If the value of CPI is so high that it threatens the value of CNY, the PBoC intervenes.

The PBoC will then raise interest rates to push back inflation rate to its desired target.

Similarly,

When the value of CPI is very low, it indicates that there is deflation. Therefore the PBoC comes in and cuts interest rate to encourage economic development.

3. Trade balance

 For the trade balances, China is largely dependent on international trade. This heavily moves CNY.

So trade balance is one of the major tools traders and investors look at to gauge its economic performance.

A positive balance of trade indicates a health economy and strong CNY while a negative balance shows a weak economy hence weak CNY.

4. Interest Rate decisions

 The rate decisions by the PBoC is an important economic news in China.

This can either be in favor of CNY value or not.

When the PBoC feels that CNY is threatened by very high inflation , it will opt for a rise in interest rates to limit borrowing and encouraging savings.

On the other hand, if its aim is to increase the CNY in circulation, it will cut the interest rates. This rather makes spending and borrowing cheap hence discourages saving.

This way, it boosts the local investment and increase demand for local products.

Trading the CHINESE YUAN (CNY) and AUD

 China is Australia’s largest trading partner taking almost half of the Australia’s products.

The great dependence of the two countries greatly affect each others economy.

When there is news release from China, you will notice a great shift in the Australian dollar movements with other major currencies.

In fact, when China’s economy expands, it creates great demand for the Australian dollar due to its high purchase of its goods hence increased GDP ppp

Besides that, news release from China attracts attention from investors all over the world.

This is because, China is the world’s largest economy PPP and second largest nominal GDP. Most of the commodity economies depend on china for both exports and imports.

Getting to know the CNY

 Renminbi (CNY), the Chinese currency.The Renminbi is the official currency of the people’s republic of china

china facts and figures

•  Country Name: People’s Republic of China
• Short Form: China 
• Abbreviation: PRC
• Government Type: Communist State
• Capital:  Beijing
•  Independence: 1^st October 1949
• President ; Xi Jinping
• Currency: Renminbi (Yuan) CNY
• Official language:  Mandarin, Chinese and Standard Mandarin
•  Imports: $1.587 trillion
• Exports: $ 2.098 trillion
• Website: http://english.gov.cn/
• Major Cities :   Shanghai, Tianjin, Hongkong, Wuhan, Guangzhou, Shenyang, Chongqing, Harbin and Chengdu,

MONETARY & FISCAL POLICY moves CNY

The Central Bank of the People’s republic of China has powers to carry out monetary policy and regulate financial institutions in mainland.

China has the largest financial asset holdings of any central bank in the world.

Headquarters are in Beijing and Shanghai.

It existed since late 1948 basing on consolidation of the Haubei bank, Beihai bank, and the Xibei farmer bank.

It has 6 overseas representative offices. Namely;

1. People’s Bank of China for America
2. People’s Bank of China for London Europe
3. The People’s Bank of China Tokyo
4. People’s Bank of China for Africa
5. People’s Bank of China Caribbean.