Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Dynamic Maximizers®
  • Retirement Compounders®
  • Free Email Signup

Why You Should be Watching China’s Currency

October 25, 2017 By Jeremy Jones, CFA

The Chinese yuan has fallen to a new six-year low as outflows surge. The central bank has either been overwhelmed by currency flooding out of the country, or it is allowing the yuan to drift lower to help the economy. The Chinese economy is the world’s second largest, and China has long been a source of deflationary pressure in the world. A depreciating yuan points toward more deflationary pressure for the rest of the world. As you can see in our chart below, a depreciating yuan hasn’t worked out so well for the U.S. stock market. Bloomberg has more on the weakening yen.

 China’s outbound yuan payments surged to a record in September, indicating greater pressures on a currency that has weakened to a six-year low in both onshore and overseas markets.

A net $44.7 billion worth of yuan payments left the nation last month, according to data posted on the State Administration of Foreign Exchange’s website Friday. That’s the most since the government started releasing the figures in 2010, and compares with August’s outflow of $27.7 billion. Goldman Sachs Group Inc. has warned such large cross-border moves can’t be explained by market-driven factors and need to be taken into account when measuring currency outflows.

The yuan has come under increased pressure of late, with some analysts speculating that the central bank has reduced support after the currency entered the International Monetary Fund’s Special Drawings Rights on Oct. 1. Renewed strength in the dollar has added to the stress, with the offshore yuan trading near a record low and the onshore currency declining in all but one session this month.

yuan

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Canadian Crypto-currency Debacle
  • The Digital Currency Trojan Horse
  • Currency Traders Don’t Like New Zealand’s New Government
  • Author
  • Recent Posts
Jeremy Jones, CFA
Jeremy Jones, CFA, CFP® is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. Richard C. Young & Co., Ltd. was ranked #5 in CNBC's 2021 Financial Advisor Top 100. Jeremy is also a contributing editor of youngresearch.com.
Latest posts by Jeremy Jones, CFA (see all)
  • Could Car Dealers Get Flooded with Cars Mid-Recession? - July 5, 2022
  • Despite Inflation, Best Year Ever for Vacation Demand - July 1, 2022
  • Purchases of Gaming Chips for Crypto Mining Tailing Off - June 30, 2022

Search Young Research

Most Popular

  • Here’s Why You Need a 15-Year Retirement Investment Plan
  • Why Work When Taxes Take It All?
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • Are Google, Amazon, and Microsoft About to Crash This Specialized Real Estate Market?
  • The Power of a Compound Interest Table
  • What Happens to Your Passwords When You Die?
  • Regulators' Bungled Attempts to Cut Emissions Drove Oil Prices Higher
  • RURAL RENAISSANCE: America Finds the Country Again
  • Is the Great Job Boom Over?
  • Corporate Bond Yields: What You Can Earn Today

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • BIDEN OUT OF TOUCH: Will America See Recession, or Worse?
  • Your Average Joe – a Man Out of Touch
  • “Talk to Me, Goose!” Time Flies in Top Gun: Maverick
  • The Dangers of Politicizing the Federal Reserve
  • FOOD SHORTAGE: Four Reasons Farms Are Suffering
  • Rich Grandchild, Poor Grandchild
  • Facebook Braces for “Worst Downturn in Recent History”
  • Happy Independence Day
  • For Investors Who Want to Stop Worrying About a Market Crash
  • Breaking News: House Election Update

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2022 | Terms & Conditions

 

Loading Comments...
 

    loading Cancel
    Post was not sent - check your email addresses!
    Email check failed, please try again
    Sorry, your blog cannot share posts by email.