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Hi Everybody~ This is Wasabi.
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Today, I am going to introduce a new indicator showing the spread of the two Yuan currencies, CNH and CNY , in percent and we can apply to the current market situation.
The first chart is China Shanghai Index ( SSE Composite ) and the second one is USDCNH (Offshore Yuan).
As you might know, the CNY has a long history of the Chinese Yuan currency, circulated only inside of the mainland China. As compare to this, there's another Yuan currency circulated and traded outside of the mainland China, which is called CNH , also known as the offshore Yuan currency.
This CNH is currently being traded in multiple places such as Hong Kong, Singapore, London and Luxembourg. Due to the limitation of the access to the CNY by the foreign investors, there has been some degree of spreads in between.
With the recent rise in the tension of the US-China trade war, the spread between the two Yuan currencies is heightened remarkably.
The indicator line will be in red when it crosses above +0.25 % in the spread and in blue when under -0.25%.
When he USDCNH and/or USDCNY crosses above 7, we will see them skyrocket to the moon.
I hope you find it useful to assess where the Yuan currency is.
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