USD/CNY Forex Pair: Trading US Dollar dan Chinese Yuan
USD/CNY Forex Pair: Trading US Dollar dan Chinese Yuan
Monday, 21 February 2022

Nikolas Prasetia

Yuan's Worldwide Journey

Talking about the price of USD/CNY will be quite interesting because it contains two currencies originating from two major countries, namely the United States and China. Talking about the condition of the two countries could be a reference regarding the condition of the USD/CNY price.

For the record, based on data presented by BIS, the USD/CNY currency pair is listed as the 6th most traded currency pair in the world and has a transaction portion of 4.1% of the total world currency transactions. So the existence and movement of the USD/CNY currency will be quite important to note.

The difference between the United States and China

From the United States, which affected USD/CNY performance, USD was more or less affected by the economic performance from the United States, where the target in 2022 is to achieve a 1% increase in interest rates by the end of the year accompanied by improvements in the economy, labor sector, and the economy. rising inflation.

But what is very interesting here is that if you look at the prospect in 2022, that the US will increase interest rates, it should have an impact on the strengthening USD. However, as seen in the movement of the USD/CNY pair, the relatively stable price movement was offset by the appreciation of the CNY currency.

From the Chinese side, the appreciation of the CNY currency was quite surprising, one of the reasons being the increase in exports and investment inflows into China which boosted demand for the Yuan, causing its value to be stronger against the USD.

The increase in exports and other things that boosted demand for the Yuan could not be separated from China's relatively stable economic conditions and supports from international financial institutions as well as the steps taken by the Chinese government.

Yuan's Story From 2013 to Present

A glimpse into the history of the CNY currency, on December 1, 2015, the International Monetary Fund (IMF) announced and granted the Yuan status as a reserve currency. Then on October 1, 2016, the IMF again added status to the Yuan, namely as a Special Drawing Rights (SDR) group along with the Euro, Japanese Yen, Pound sterling, and the United States Dollar. With these statuses, it makes Yuan easier to use outside China as a transaction tool.

This journey is inseparable from the efforts of the Chinese Government, through the People's Bank of China (PBOC) which is in 2006, the Yuan currency peg against the United States Dollar was released so that USD/CNY movements could move freely.

With this policy, coupled with the status granted by the IMF, the CNY currency became the 13th most traded currency in 2013, became the 4th most traded currency in 2015, and became the 6th most traded currency in 2019.

USD/CNY Price Movement

Looking at the high volume of transactions in recent years, especially since 2017, USD/CNY daily price fluctuations experienced a 1-day volatility spike of 1.54 percent, with a daily moving average of 0.17 percent.

Based on these volatility conditions, which are starting to become attractive despite daily movements that are not as significant as in other currency pairs, the USD/CNY currency pair at ICDX can be an additional choice for transacting foreign currencies, especially with transaction liquidity that you don't need to worry about and coupled with a trading margin of $6 per lot.

ICDX Launches USD/CNY and 3 Other Forex Pairs

The USD/CNY pair can be said to be quite difficult to trade in some countries or through brokers (brokers). However, the ICDX exchange managed to launch a micro USD/CNY contract (1/100th of a standard forex contract) which can be traded live since February 21, 2022.

Together with USD/CNY Mic, ICDX also launched three other forex pairs, namely AUD/CAD Mini, AUD/CHF Mini, and GBP/JPY Mic. These four contracts complete the collection of forex incorporated in GOFX products. Click the banner below to view the full contract specifications.

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