Lunar New Year: Trading With Chinese Impact On The Market

China’s development in financial and economic terms cannot be unnoticed. The Middle Kingdom influences worldwide markets in multiple cases. Investors especially have to consider the calendar, which is different in China. As a result, we can celebrate the Lunar New Year. Trading strategies change due to this significant event.

Lunar New Year: Trading Outside China

Even though the Chinese created the Lunar New Year, trading in other countries of the region is also affected. Malaysia, the Philippines, and Singapore feel the impact of this holiday and this particular couple of days. Traders also pay attention to Hong Kong, which is the home of multiple companies and one of the most essential indexes in the economic region.

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Why is it so crucial for the whole region? For example, Hong Kong uses the Gregorian calendar, which means – theoretically – the Lunar New Year doesn’t affect the citizens. However, traders must keep in mind that millions of people living in this region outside China are Chinese and still respect their traditions. It is one of multiple reasons why investors leaning towards Far Eastern assets have to pay attention during celebrations.

Chinese New Year And Traditional Gifts

Traders have to pay attention not only to holidays and opening and closing market hours but also to tradition. And that may also lead to some movements in the forex market.

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Chinese New Year has several gifts usually given to friends and family. The most popular “red packages” contain cash. It may sound bizarre, but the yuan can gain strength when millions of Chinese citizens run towards ATMs or send their packages via bank transfer. It can also bolster other regional currencies like Singapore or Hong Kong Dollars.

Gold’s Increased Demand

It is not surprising that there are other gifts than money when it comes to the Lunar New Year. As in other cultures and holidays, jewelry is vital during celebrations.

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Every trader should understand the value of good timing, especially when it comes to massive events like the Lunar New Year. Trading gold, a recognizable safe asset, comes from the increased demand for this precious commodity due to jewelry purchases. Moreover, investors can also keep tabs on silver, platinum, and palladium.

Not Only Far East – Lunar New Year And Trading Worldwide

China has a substantial impact on the worldwide economy. Its economic battle against the United States shows its power compared to other countries. That’s why the Lunar New Year also influences trading in the macroeconomic aspect. These couple of days are bank holidays annually. Financial markets are stopped, as well as factories manufacturing and exporting substantial amounts of goods.

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