9 Dec 2014
Yuan plunges to 6-yr low as PBoC announces monetary policy changes
FXStreet (Mumbai) - The Chinese Yuan plunged against the US dollar today and posted the biggest daily drop since 2008 as People's Bank of China (PBoC) tightened its monetary policy.
The USD/CNY pair was seen trading at 6.1859 levels, after having clocked a high of 6.2059 levels in early Asian morning. The PBoC made significant changes in its monetary policy by setting the USD/CNY fix lower, which implies some tightening in its monetary policy. However, to markets’ surprise, this move by PBOC triggered a huge sell-off in the Chinese currency.
Moreover, PBoC also imposed stricter collateral rules for short term loans.
USD/CNY Technical Levels
To the upside, the next resistance is located at 6.1913 (5-day SMA) levels and above which it could extend gains to 6.20 levels. To the downside immediate support might be located at 6.1803 (20-day SMA), below that at 6.1650 (50-day SMA) levels.
The USD/CNY pair was seen trading at 6.1859 levels, after having clocked a high of 6.2059 levels in early Asian morning. The PBoC made significant changes in its monetary policy by setting the USD/CNY fix lower, which implies some tightening in its monetary policy. However, to markets’ surprise, this move by PBOC triggered a huge sell-off in the Chinese currency.
Moreover, PBoC also imposed stricter collateral rules for short term loans.
USD/CNY Technical Levels
To the upside, the next resistance is located at 6.1913 (5-day SMA) levels and above which it could extend gains to 6.20 levels. To the downside immediate support might be located at 6.1803 (20-day SMA), below that at 6.1650 (50-day SMA) levels.