USD/CNH Forex Trading
The trading pair of the US dollar to the offshore Chinese yuan represents the two largest economies in the world, making it fascinating to keep an eye on it. Interested? Start trading USD/CNH with FXOpen today!
USD/CNH Live Charts
Use our USD/CNH live charts to get the most up-to-date insight into the recent performance of this pair and other currency pairs used in forex trading. It can help you make informed decisions at home or on the go if you use the TickTrader desktop platform, web terminal, or mobile app. Our real-time FX USD/CNH chart includes the very latest price, historical data, and technical analysis tools to help inform your next trade.
What Is USD/CNH Trading?
The USD/CNH FX rate refers to the exchange rate of the offshore renminbi against the US dollar in
the foreign exchange market. It shows how many units of Chinese currency you need to buy one US
dollar. USD/CNH is classified as an exotic currency pair, as one of its constituent currencies is
that of an emerging nation.
The US dollar is the legal tender of the United States. It was officially established in 1792 when
Congress passed the “Mint Act.” Since then, USD has been the principal unit of currency in the US,
later becoming the most traded currency globally. Interestingly, 5 US territories and 11 more
foreign nations, including El Salvador, Ecuador, and the British Virgin Islands, use the US dollar
as their official currency.
Initially, the USD rate was linked to fine gold and silver – there was a bimetallic standard that
set the value of the US dollar. Today, the rate is determined by market factors.
The renminbi (RMB) is the official currency of China. There are onshore and offshore RMB, known as
CNY and CNH, respectively. Both are also often referred to as the yuan.
Here’s a short history. In 2009, China lifted restrictions on trade settlements in yuan with Hong
Kong. This led to the development of yuan markets in other offshore zones. They exist alongside the
market in mainland China, resulting in two yuan markets. Due to China’s cross-border currency
controls, the offshore price of the Chinese yuan does not always equal the price onshore. Currently,
the CNY reference rate is determined by the People’s Bank of China (PBOC) and released daily. At the
same time, CNH is traded freely on global markets.
USD/CNH Historical Performance
Let’s look at past price movements and trends. The US dollar/Chinese yuan pair is not highly
volatile.
The exchange rate rose until February 1994, when it peaked at about 8.72. Then, the price
remained stable and almost didn’t change until 2005, when it moved about 0.5 points overall.
Between 2005 and 2009, the rate fell to 6.8. After 2009, restrictions on trading were lifted, so
the price began to change more frequently, and the offshore yuan was introduced. A strong
downtrend continued until 2014. Interestingly, starting from 2014, the trends change around
every two years – the USD/CNH rate plunges to 6 and surges to 7.
Well-established trends make it much easier for traders to forecast price movements of the
USD/CNH pair.
Major Factors That Affect the USD/CNH Pair
China is the world’s largest exporter and the second-largest economy, following the United
States. The USD/CNH FX rate changes based on global economic and political events, trade
relations between the US and China, and changes in monetary policies.
Trade relations are especially important when we analyse the USD/CNH exchange rate. Everyone
knows about the US-China trade war that started in 2018 and ended in 2020. Although some are of
the opinion that China suffered the most, both economies were hurt by it.
If you’re interested in FX trading, choose the best rates and instant transactions with FXOpen. Chart analysis and other instruments
will help you forecast future price movements, so look at a pair’s performance for the last
years, months, hours, or even minutes and trade at your best.