China going to sell $6 Billion Bonds, How it affects USD and Yen?

China going to Sell $6 Billion Bonds

The Chinese government likely to the sale of $6 billion bonds as the news came yesterday which is ahead of US elections in November.

Bank of China Head quarter in Beijing city

Chinese ministry to raise this package via three, five, ten, and thirty-year maturities. But the Chinese Government did not announce officially. This dollar and Euro bond sales start to give pressure to the US dollar as FED keeps rates lower.

China bought more Japanese Government bonds around 1.46 Trillion yen ($13.8 Billion USD) which was 3.6 times more than the same period last year. 

china vs japan hand fight

“Many reserve managers buy JGBs (Japanese Government Bonds) and then swap or hedge the currency back into US dollars, earning an additional basis premium,” said David Nowakowski, a senior strategist of multi-asset and macro at Aviva Investors.

This is one of the major reason for “Japanese Yen” to get stronger.

USDJPY Falling down

USDJPY has broken the bottom zone of the Ascending channel and retested it.

usdjpy broken and retested in ascending channel

Japanese Yen is getting strong and US Dollar is getting weak due to this Chinese Government going to sell $6 Billion U.S Bonds and they already holding $13.8 Billion Japanese bonds. Another side, the U.S Stimulus package driving the U.S Economy.

This is the fundamental reason for USD JPY to fall down.

U.S Stimulus Package driving the US Dollar

USD has become weaker due to the expectation of U.S stimulus package release. The US Election is coming soon on next month November 3, 2020. 

trump and biden fight in 2020 U.S Election

Whoever wins in the Election either Trump or Biden, 2.2 to 3 Trillion Dollar stimulus package should be provided to the people who face the worst situation due to COVID-19.

US Dollar seems to be weaker at this time. Whenever the US Dollar tries to become strong, It just making only the correction, not a complete reversal. USD is in a Correction mode now.

This is the reason most of the currencies are making up and down range movements. Please be patience and trade with care.

EURUSD Struggling to move

EURUSD has recently broken the bottom zone of the Ascending channel in the 1-hour time frame chart.

eurusd struggling to move up or down

But still, the market struggles to move up or down because of hesitation going among the U.S Investors.

During the Election, the US Dollar will fluctuate more.

NZDUSD Trend line analysis

NZDUSD has reached the top zone in both major and minor trend lines.

nzdusd reach the top in major and minor trend line

Let’s wait for the confirmation of reversal or breakout.

EURNZD Higher low analysis

EURNZD is standing at a higher low zone in the 4-hour time frame chart.

eurnzd at the higher low zone now

Let’s wait for the confirmation of reversal or breakout.

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