USD/CNY Exchange Rate Soars as King Dollar Dominates
The USD/CNY price continued surging even after the upbeat economic data from China. It rose to a high of 7.02, which was the highest level since July of 2020. The pair has surged by more than 11% from its lowest level this year.
Chinese yuan crash continues
The USD/CNY price rallied after China published the latest economic data. According to the country’s statistics agency, fixed asset investments rose from 5.7% in July to 5.8% in August. This increase was better than the median estimate of 5.5%.
Additional data showed that the volume of retail sales rebounded in August as they rose by 5.4% from 2.7% to 5.4%. This increase was also better than the median estimate of 3.5%.
Meanwhile, the unemployment rate declined from 5.4% to 5.3% while industrial production rose from 3.8% to 4.2%.
Therefore, these numbers mean that the country’s economy was doing well as more cities continued to reopen.
The USD/CNY price rose because of the substantially strong US dollar. The dollar index surged to $110, which was the highest level this week. The dollar has surged as investors focus on the soaring American inflation. Data published this week showed that the country’s inflation in August, pushing many analysts to predict that the Fed could hike rates by 100 basis points.
USD/CNY forecast
The daily chart shows that the USD/CNY pair continued its bullish trend as demand for the US dollar rose. It remained above all moving averages and the important resistance level at $6.80, which was the highest point this year. The Relative Strength Index (RSI) has moved above the overbought level
Therefore, the pair will likely continue soaring as bulls target the next key resistance at 7.2. A drop below the support level at 6.9 will invalidate the bullish view. Find out more about how to send money to China.
