rounded corner
rounded corner
top border

Strong Chinese data propels yuan to new 16-month highs

Bookmark and Share



Some less dovish RBA Minutes, a new 16-month low for the USDCNY fix, and Chinas stronger than expected August data set for Industrial Output and Retail Sales propelled the USD lower in Asia last night, but it unfortunately did little to drive USDCAD lower and out of its recent 1.3130s to 1.3190-1.3200 price range. European traders played catch-up to Asia's risk-on tone earlier this morning by bidding up equities and bond yields but EURUSDs continued struggle with 1.1880s is keeping USDCAD supported once again. Broader risk sentiment has not really taken a hit following this morning's release of weaker than expected US Industrial Production for August.

China Aug Industrial Output YY 5.6%, 5.1% f'cast, 4.8% prev;

China Aug Retail Sales YY 0.5%, 0.0% f'cast, -1.1% prev









Last nights rallies for the Australian dollar and the Chinese yuan very much helped the Euro drift higher into European trade today, but weve noticed the markets continued struggle to surpass the familiar 1.1880s chart resistance level. A wave of EURGBP selling knocked EURUSD back below this level during the 2amET hour and the euro buyers now appear to be losing the battle of two-way hedging flows going into this mornings 2.4BLN worth of option expiries between 1.1875 and 1.1900. Germanys September ZEW survey beat expectations today, but this had very little impact on the marketplace.

German Sep ZEW Economic Sentiment, 77.4, 69.8 f'cast, 71.5 prev
German Sep ZEW Current Conditions, -66.2, -72.0 f'cast, -81.3 prev








Sterling inched lower in Asia last night (against the broadly weaker USD theme) as traders digested the Torys successful second reading of their Internal Market Bill (IMB), but it has recovered those losses as we head into NY trade today. Market chatter is chalking up this mornings bounce to the upbeat overall risk tone, the UKs better than expected August Employment Report, and the thought that the IMB will face more serious scrutiny from Tory rebels in next weeks amendment vote. Wed agree with all of this, but we think the UK's now almost certain collision course with Brussels at the end of the month should invite GBPUSD sellers on strength.

UK Aug Claimant Count Unem Chng, 73.7k, 100.0k f'cast, 94.4k prev, 69.9k rvsd
UK Jul ILO Unemployment Rate, 4.1%, 4.1% f'cast, 3.9% prev
UK Jul Employment Change, -12k, -125k f'cast, -220k prev
UK Jul Avg Wk Earnings 3M YY, -1.0%, -1.3% f'cast, -1.2% prev
UK Jul Avg Earnings (Ex-Bonus), 0.2%, -0.2% f'cast, -0.2% prev








The Australian dollar confidently regained the 0.7280s last night after the RBA reported, what was deemed by the financial media to be, less dovish than expected Minutes from its latest policy meeting. We wouldn't agree with this analysis, but we feel the better than expected Chinese data released shortly thereafter justified the move higher for AUDUSD. The market has since been tracking EURUSD however, and so that has meant more two-way flows over the course of the European morning.








Dollar/yen is dumbfounding traders this morning as it de-couples from US yields and instead takes out yesterdays chart support level in the 105.50s. The fact that this selling emerged just before the NY open, when the USDs overnight tone was arguably the most mixed, has us thinking that this is a flow-driven move more than anything else. A closing print below the 105.40s could invite a quick retest of the 105.00-105.25 level, where over 4BLN in options will be expiring over the next 48hrs.







Charts: Reuters Eikon

Interested in creating a custom foreign exchange trading plan?Contact usor call EBC's trading desk directly at1-888-729-9716.

About Exchange Bank of Canada
Exchange Bank of Canada, EBC Canadas Foreign Exchange Bank, is the only Schedule 1 Canadian bank specializing in foreign currency exchange and international payments for financial institutions and corporations. EBC provides innovative foreign exchange management and integrated international payment solutions tailored to meet business needs on a global scale. Leveraging industry leading technology and a client-focused team of experts EBC delivers comprehensive, cost-effective and trusted payment processes and foreign exchange currency solutions to create financial and operational efficiencies. To learn more,

Disclaimer:All product names, logos, and brands are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.
This publication has been prepared by Exchange Bank of Canada for informational and marketing purposes only. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which Exchange Bank of Canada, its affiliates or any of their employees incur any responsibility. Neither Exchange Bank of Canada nor its affiliates accept any liability whatsoever for any loss arising from any use of this information. This publication is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any of the currencies referred to herein, nor shall this publication be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The general transaction, financial, educational and market information contained herein is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a "call to action" or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. You should note that the manner in which you implement any of the strategies set out in this publication may expose you to significant risk and you should carefully consider your ability to bear such risks through consultation with your own independent financial, legal, accounting, tax and other professional advisors. All Exchange Bank of Canada products and services are subject to the terms of applicable agreements and local regulations. This publication and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced in whole or in part, or referred to in any manner whatsoever nor may the information, opinions and conclusions contained in it be referred to without the prior express written consent of Exchange Bank of Canada.

Recent articles from this author

About the author

Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.

Interested in creating a custom foreign exchange trading plan?  


Phone: 888-729-9716


Contributing author since 09/25/17 

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. is not a broker, nor does it have an affiliation with any broker.

Copyright ©2005-2020, a product. All rights reserved.

About Us  •   Sitemap  •   Terms of Use  •   Privacy Policy