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Yuan Currency Volatility: USDCNH Eyes Trade War & Looming Data
Spot USDCNH prices notched a parabolic ascent since markets caught wind that trade tensions between the US and China were escalating. The shocking deterioration in negotiations stunned market participants and sent traders fleeing from risk and into safe-havens. Likewise, the jolt of uncertainty caused currency market volatility to surge and was notably reflected in USDCNH implied volatility measures. Following President Trump’s tweets on May 3 which stated that the US will increase tariffs on Chinese exports, USDCNH overnight implied volatility skyrocketed from 2.91 percent to 6.51 percent and exploded further to ... (full story)