USDCNY: Yuan Strength Continues on Huge Trade Pact
USDCNY continues to push lower after the Yuan gained on China’s huge RCEP trading pact. The new deal saw 15 nations across the Asia-Pacific region signing up to the world’s largest regional free trade agreement.
The Regional Comprehensive Economic Partnership (RCEP) was signed via virtual conference and will connect 2.2 billion consumers and 30% of global economic output. The deal is another sign of China’s dominance in the region and the waning influence of the U.S. The deal could also make it harder for a Biden Presidency to continue Trump’s “America First” policies.
The Yuan has been gaining against the greenback since the media declared Joe Biden the President-elect, with the USDCNY reversing a rally as the late counting continued. This has seen the pair break a key support level and the path lower could continue.
On the economic front, China should also see an advantage over the U.S. and Europe, with the latter two countries stuck with virus problems. Europe still sees lockdowns into early-December, while the U.S. has been dealing with a record-high rise in cases.
USDCNY Technical Outlook
USDCNY has built on the break of support at 6.6700 and continues to see further gains with the pair now trading at 6.5525. The pair could drop as far as 6.2700 with little support available below. This will depend on the daily closes and the election result. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.