Will the devaluation of the Yuan, pave the way for the fall of the Crypto and US equities market.
No, this isn’t a shit coin, its the Chinese Yuan. Since its prior high, it has fallen about 5.3%
The last time, the Yuan devalued was back in 2015 and 2018. Looking back historically, once the Yuan finds its bottom, it triggers a rally in the US market.
Economics 101
Why would a country decide to devalue their own currency?
- To strategically lower the purchasing power of a nation’s own currency
- To gain competitive edge in global trade and reduce sovereign debt
- To increase exports and decrease imports
Ultimately this leads to an increase in economic growth and decrease the current account deficit.
Triggering the wealth effect.
Having a positive impact on nation’s capital and housing market, which boosts domestic consumption.
$DXY has been on an absolute tear and is at resistance. If price retraces, it may support the thesis on equities rallying which may carry onto crypto as we see a correlation between the $NQ and $BTC at this point of time.
Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing
