Читать книгу Currency Trading For Dummies - Kathleen Brooks - Страница 40

China has been climbing the global economic ranks. At the time of writing, it was the world’s second-largest economy, but the same is not true for the Chinese currency, the renminbi (also known as the yuan). Although the role of the renminbi in global forex trading has surged, according to the 2019 BIS Triennial Central Bank Survey, the renminbi was the eighth most-traded currency in the world, with a share of 4.3 percent in global forex volumes. However, most of this trading activity is for trade purposes only.

The renminbi is a managed currency, which means that the Chinese government controls its value. This makes it very difficult to trade for speculative purposes. Either the currency doesn’t move very much (because it can move only within a controlled band, which means there are few trading opportunities), or the government intervenes out of the blue, creating a wave of volatility that can take you out of your position before you know it.

Most currency brokers allow you to trade the renminbi, but why would you want to? Some people believe that the Chinese government will eventually loosen its control over the renminbi and allow it to trade freely. Due to the importance of the Chinese economy, if the currency could trade freely, the renminbi might become a currency that would be liquid enough to rival the U.S. dollar. For now, though, it doesn’t look like Beijing will embark on a liberal currency regime any time soon.

Warning: A managed currency like the renminbi can be fairly illiquid, so it can experience large price moves if the government suddenly chooses to intervene. Due to this, trading the renminbi is considered risky.

The U.S. dollar is the most important global currency, with the bulk of forex trading usually involving the dollar on one side of the transaction. Commodities are priced in dollars, and a vast amount of global currency reserves held by central banks is in dollars. This makes the dollar (also affectionately referred to as the “greenback” or the “buck”) the most liquid currency in the world. As a trader, you need to know whether the dollar is strong or weak. The U.S. dollar index helps you do this because it gives you a broad-based view of how the dollar is performing in the G10 forex space. As a currency trader, be sure to follow the U.S. dollar index, especially its technical developments.

The easiest way to trade the U.S. dollar index is through a futures account (see Chapter 14) using call and put options, which are covered in Chapter 15.