Chinese Yuan: Gradual appreciation bias with key levels against US Dollar – OCBC
OCBC’s Sim Moh Siong and Christopher Wong highlight that RMB and CNH remain supported by softer USD dynamics and exporter conversion, but the People’s Bank of China is signalling a preference for gradual gains via its fixing.
The Chinese Yuan and CNH remain buoyed by softer USD dynamics and exporter conversions, according to OCBC's Sim Moh Siong and Christopher Wong. The People's Bank of China is indicating a preference for gradual appreciation, with the RMB nearing multi-year highs. However, the fixing process continues to resist further gains, suggesting that any further appreciation will likely be gradual.
USD/CNH traded with mild bearish momentum and an oversold RSI, hinting at a potential snapback around defined support and resistance levels. The mid-point of USDCNY rose slightly to 6.7817 on Friday, staying around 550 pips above expectations. This indicates that the PBoC remains comfortable with the gradual strengthening of the RMB but is cautious about overly rapid or one-way moves.
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