Chart of the day: Yuan retraces
The Chinese authorities like to manage their exchange rate, as they do with other aspects of the economy, and are just one of many countries that do so. Having allowed the yuan to appreciate for the best part of a decade since 2005, they are now letting it weaken. In 2015, it was in fact one of the stronger currencies against the mighty US dollar, while commodity and emerging-market currencies lost anything up to 50 per cent of face value. Therefore it is no surprise that since November it has moved from 6.317 to January’s high of 6.507. Consolidation below here should continue until at least the end of the month, then it will rally to 6.645 because momentum is record-bullish.
Nicole Elliott is a technical analyst