What to Trade in October
Welcome to October, the tenth month of 2023. For this installment of What to Trade, I have handpicked a few of my favorite trade ideas for the month. Let’s go over a few of them.
Digital Yuan: Chinese Currency of the Future
2022-12-15 • Updated
e-CNY’s destiny
Since 2014, the National Bank of China has indicated an interest in developing a digital currency focused on the domestic market for payments between individuals. Research, testing, and implementation are carried out centrally and overseen by the Financial Committee of the State Council of the Republic of China.
The Digital yuan was released to improve the quality of financial and services and reduce the costs of maintaining the circulation of the money supply, which in 2020 amounted to 8.43 trillion yuan.
The goals of the issue are to meet the demand of the population for digital money and increase the convenience of payments’ efficiency and safety.
e-CNY Operators
Commercial banks that have the right to open digital wallets of different levels to users will be the main operators. Operators can develop mobile applications to use e-CNY and offer them to their customers. On the other hand, authorized operators are required to protect users' personal and financial information and be responsible for e-CNY authentication.
Future of Chinese digital currency
In the legal document of the digital yuan, it is stated that it will be treated in the same way as the classical yuan. It also confirms the legal status of the digital yuan as legal tender. The changes are confirmed by the amendment to the Law on the National Bank of China. The yuan can now officially be in both cash and digital form.
It is mentioned that no interest is accrued on the digital yuan in circulation, as well as on the ordinary one. Authorized operators will not charge fees for its storage, exchange, and transactions for the convenience of calculating the new currency.
There is no information on the further implementation of e-CNY in the official document. China follows the digital currencies discussion by the G20 countries.
Conclusion
The fact of the digital yuan development can be considered as a signal indicating the readiness of the Chinese government to dialogue in the field of cryptocurrency regulation, especially in connection with the recent prohibitive measures in the circulation of Bitcoin and mining.
Similar
Another Rate Hike Is coming from the Bank of Canada
The Bank of Canada (BoC) is expected to raise interest rates for the second time in a row on Wednesday, reflecting resilient growth, a tight labor market, and persistent underlying inflation…
CPI release will decide the next FOMC step
Today's focus is on the US CPI data, which experts believe will be better than expected. The forecasted US CPI m/m is 0.3%, and y/y is 3.1%, a positive sign for the market as the Fed's inflation target is 2%. Even a strong inflation reading may lead to one more interest rate hike, keeping traders somewhat worried. The reaction of the 2-year Treasury yield and the dollar index will indicate the Fed's next move. With inflation slowing down, the path of least resistance for the US equity market is skewed to the upside.
Latest news
USD: Powell Speaks on Cutting Interest Rates
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
WTT: Currency Pairs To Trade In April
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
EURUSD: Seeking liquidity in weekly selling zones. Key intraday levels.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
