USDCNH – Weekly Chart
USDCNH found resistance with a close at 1.3640 and the price has now breached support at the 7.097. That would be the obstacle for a rebound and lower support comes in at 6.709.
The US dollar has been on a rally against the Chinese yuan since 2022 when the Federal Reserve began raising its benchmark interest rate. The recent 50 basis point cut from the central bank has put the greenback into reserve.
Traders are also betting that the PBoC’s desire to support markets will mark a low in the economy.
The Chinese economy has data ahead on Monday with the release of NBC manufacturing PMI data at 9:30 am HKT. Tuesday evening will have similar data from the US economy.
Moving into next week, it will be one month until the US Presidential election and investors are still seeking information on policies, while polls will also be watched to gauge the potential winner.
A win for Donald Trump would have implications for tariffs on Chinese goods with protectionism being a feature of his previous term.
Xi Jinping has said the Chinese economy needs “forceful” interest rate cuts to remain competitive and kickstart the economy.
Following the recent Politburo meeting, state news cited government officials as saying: “Some new situations and problems have emerged in the current running of the economy.
“We must view the current economic situation comprehensively, objectively and calmly, face difficulties squarely, and strengthen confidence.”
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