Chinese Yuan Gains Ground on the US Dollar After Stimulus

The recent stimulus measures from the People’s Bank of China has boosted the price of the US dollar. 

USDCNH – Weekly Chart

USDCNH – Weekly Chart

USDCNH found resistance with a close at 7.364 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 NBS 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.”

Recent News
Start Trading Now !
Try our demo account for free to learn trading. When you’re ready, switch to a live account and start trading for real.
Popular posts
ATFX

Account Registration Unavailable

Please note that you may be accessing this page from outside Australia. For retail and professional inquiries regarding AT Global Markets (Australia) Pty Ltd, kindly reach out to us at [email protected].

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for Hong Kong residents. Such information and materials should not be regarded as or constitute a distribution, an offer, solicitation to buy or sell any investments.

使用限制: 本網站的產品及服務不適合香港居民使用。網站內部的信息和素材不應被視為分銷,要約,買入或賣出任何投資產品。

ATFX

Restrictions on Use

AT Global Markets (UK) Limited does not offer trading services to retail clients.
If you are a professional client, please visit https://www.atfxconnect.com/