The first day of June should’ve brought us the US default. Unsurprisingly, the US House passes the debt ceiling bill at the latest possible moment.
Western investors abandon their previous positions on Yuan
A bunch of Western investors previously placed bets for the last two years that China’s Yuan currency would go down due to a weaker Chinese economy. Other potential risks include a debt crisis and capital outflows. However, they’ve recently changed their positions, motivating their move by the fact they might lose in the short term if they try to take on the People’s Bank of China. This country’s key financial institution has been taking several measures aimed at keeping the national currency stable.
It’s the case ahead of an autumn congress of the leading Communist Party of China, expected to enable Xi Jinping, Chinese leader to consolidate his power. Additionally, the Chinese economy has been more sturdy than expected and the nation’s government has taken adequate measures to reduce capital outflows. In addition to this, the greenback has been rebounding from revenues it made last year.
Key global fund managers, including Old Mutual Global Investors, Asset Management, Goldman Sachs and Investments and Aviva have already taken off their short Yuan positions.
About 24% of global central banks intend to increase gold reserves in 2023. Rising inflation, geopolitical turmoil, and worries about interest rates are reasons to increase gold reserves.
Greetings to a brand new week full of events, economic releases and US debt frictions. We are here to tell you everything you need to know!
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