USD/CNH: Upside risks near term – OCBC
|CNH continued to trade under pressure amid expectations for further rate cuts at home while economic recovery remains uneven. Pair was last at 7.3013, OCBC’s FX analysts Frances Cheung and Christopher Wong note.
PBoC may continue to restraint the RMB
“US tariffs can further hurt RMB. Yesterday, President Biden fired a parting shot in tightening curbs on China’s access to AI memory and chips tools. Recent tariff headlines served as a constant reminder that wider tariffs could soon hit when Trump comes on board officially in Jan-2025.”
“PBoC may continue to restraint the RMB from excessive weakening via daily fix, but likely they may have to also use offshore funding squeeze (not used yet) to ensure more effective transmission. Elsewhere, there may be other stimulus support measures to support the domestic economy, but these are at best mitigating factors only.”
“Path of least resistance for RMB may be skewed towards further weakening. Daily momentum shows signs of turning bullish while RSI rose towards overbought conditions. Upside risks intact. Resistance at 7.32, 7.3450 levels. Support at 7.29, 7.2745 levels.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.