Forex
Analysts predict record Chinese yuan rise
The Chinese yuan rose in the last few days after the country announced further easing measures against COVID-19, but this is only the beginning. This was stated by Cathy Lien, managing director of currency strategy at BKAsset Management in the Street Signs Asia program, according to CNBC.
According to the analyst, the Chinese currency may strengthen further to 6.8 against the U.S. dollar. Against this backdrop, the EURODOLLAR FUTURES exchange rate could fall slightly, which traders should take into account.
“Investors are underestimating the sustainability of a potential recovery over the next few months,” Lien said.
She said China’s yuan rise will be positively affected by the coming release of Chinese economic data, which includes industrial production and retail sales.
“We will see depressed Chinese data turn into positive surprises. This will renew demand for the Chinese yuan and lift the yuan even higher than it is now,” she said.
Earlier, the Chinese yuan weakened to 7.3 against the U.S. dollar in early November, its worst performance since January 2008. But the Chinese yuan quickly recovered to 6.96 within about a month after Chinese authorities promised to loosen coronavirus measures.
Earlier we reported that the dollar was declining on December 9.
U.S. stock index futures are rising Thursday, trading data showed. Markets are assessing the outcome of the U.S. Federal Reserve (Fed) meeting.
The Dow Jones Industrial Average (DJIA) futures rose 0.22% to 32,329 points, the NASDAQ high-tech index rose 0.96% to 12,828.5 points and the S&P 500 broad market index rose 0.48% to 3,989.75 points.
The Fed on Wednesday expectedly raised its benchmark rate by 25 basis points to 4.75-5% per year. The regulator noted that it does not expect the rate reduction this year, but allows it next year. U.S. exchanges were down 1.6% in Wednesday trading.
According to the CME Group, 55.8% of analysts now expect the Fed’s discount rate to remain unchanged in May, while 44.2% expect it to rise another 25 basis points. Thus, markets concede that the Fed may interrupt the cycle of hikes that began last March.
At the same time, shares of cryptocurrency exchange Coinbase were down 10.6% in pre-bid trading. The exchange this week received notice from U.S. authorities of an impending charge of violating laws.
Later in the trading, statistics on initial jobless claims in the U.S. for the week through March 18 will be released. Analysts forecast that the figure would increase by 5 thousand to 197 thousand applications.
Earlier we reported that the US budget deficit was $262bn in February.
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According to a report from the U.S. Treasury Department, the U.S. budget deficit in February was $262,434 billion compared to a $38.8 billion deficit in January. The Dow 30 also had problems.
Analysts at DailyFX suggested that the nation’s budget deficit for February was expected to be $256 billion. A year earlier, in February, the U.S. posted a budget deficit of $216,590 billion.
According to the GAO report, U.S. government spending rose 3.5 percent year over year last month to $524.548 billion, while revenue, in contrast, declined 9.5 percent to $262,114 billion.
Earlier, the U.S. edition of the Washington Post published an editorial stating that the new draft budget proposed by the Biden administration undermines U.S. national security and its ability to invest in the future, because it suggests a further growth of the U.S. national debt.
The WP editorial board noted that the new draft budget assumes a $2 trillion budget deficit, including due to the high cost of providing health insurance to the elderly of the baby boomer generation.
Earlier we reported that the EU has agreed to reduce energy consumption by 11.7% by 2030.
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