The next few months will be crucial for USDCNHCurrencies play a pivotal role in the trading game, as in importers from China. They buy goods from US and pay in USD , therefore if the CNH is depreciating 2013, that means their costs will get higher. In 2013, 6 yuan equal to 1 USD , fast forward 11 years later, it is now 7.3 yuan to 1 USD. That is almost 11.8% depreciation on a YOY basis for the last 11 years.
Someone has to bear the costs and it is naturally the final ends of the straw, from wholesalers to retailers to final consumers.......
Some supporting article :https://www.msn.com/en-ph/money/economy/china-s-exports-slow-imports-decline-in-november/ar-AA1vHpLN
Will I trade this pair? Very unlikely as there were no historical data to show it will breaks above the current 7.3 price level. If it does and as predicted by analysts that it will goes to 8, then the risk reward ratio is very good.
Please DYODD
