China's fresh Yuan factor comes into play when national currency drops

China's fresh Yuan factor comes into play when national currency drops

Since China changed how it actually calculates the Yuan's guidance rate, traders have discovered that this factor is lopsided and also operates mostly to ongoing Yuan depreciation.

The hidden factor put in place by China’s major financial institution to diminish price swings has been at play only on days when the currency’s last session close turned to be weaker than intended.

The major bank introduced the so-called counter-cyclical factor into its formula, determining the mid-point reference rate for the Chinese currency in late May telling it would enable the Yuan’s value to better reflect demand and supply.

That secretive factor has already made it nearly unreal for the market to evaluate each day's mid-point, around which the Chinese currency is allowed to trade.

Traders suspect the fresh formula is basically aimed at keeping the Chinese Yuan steady, in particular to prevent it dropping excessively and to change market hopes as for its depreciation.

Similar

Aussie and Kiwi ascend

On Tuesday, the Australian and New Zealand dollars edged up versus their American rival notwithstanding the publication of dismal Australian data because market sentiment on the US currency turned to be vulnerable ahead of the Fed’s last policy gathering…

Greenback is steady with focus on Fed gathering

On Tuesday, the evergreen buck was sturdy enough keeping to two-week maximums against a basket of key currencies, with market participants waiting for the Fed’s policy gathering this week for new catalysts…

Bitcoin futures overleap $18,000

On Monday, the world’s craze for cryptocurrencies entered a fresh chapter as bitcoin futures shockingly ascended by one-fifth of their market value at a closely-monitored launch…

Popular

promotions you can be interested in

Deposit with your local payment systems

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Internal error. Please try again later

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera