CFD Trading Rate US Dollar vs Chinese Renminbi Yuan (USDCNH)

US Dollar (USD) is expected to trade in a 7.2550/7.2900 range. In the longer run, current price movements are likely part of range trading, probably between 7.2400 and 7.2900, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Current price movements are likely part of range trading

24-HOUR VIEW: “Yesterday, we expected USD to ‘trade in a range, most likely between 7.2500 and 7.2900.’ However, USD traded in a narrower range than expected (7.2560/7.2833), closing largely unchanged at 7.2790 (-0.02%). Momentum indicators are neutral, and further range trading appears likely. Expected range for today: 7.2550/7.2900.”

1-3 WEEKS VIEW: “Our most recent narrative was from last Friday (06 Dec, spot at 7.2660), wherein ‘the current price movements are likely part of range trading, probably between 7.2400 and 7.2900.’ USD traded in a relatively quiet manner the past few days and there is no change in our view.”

USD/CNH rose yesterday after a Reuters report said that China’s top leaders and policymakers are considering allowing the RMB to weaken in 2025 as they brace for tariffs. But the pair fell today after daily USD/CNY fix continue to be set below 7.20. USD/CNH was last at 7.2668 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Risks remain skewed to the downside

“We expect policymakers to continue using the fix to manage RMB expectations for now until tariff hits (if any). In the interim, we would keep a look out for the China’s CEWC meeting which wraps up today. Expectations are building up for stimulus support after politburo vowed to stabilise property and stock markets.”

“Officials also pledged to ramp up ‘extraordinary counter-cyclical policy adjustment’ to support the economy. Follow-up policy action is crucial, and bear in mind markets are impatient. We caution that any delay in concrete policy action may setup a case for disappointment (again). An unwinding of politburo optimism may weigh further on other Asian FX such as KRW, SGD and MYR.”

Daily momentum is bearish while RSI fell. Risks remain skewed to the downside. Support at 7.26 (21 DMA), 7.2340 (23.6% fibo retracement of Sep low to Dec high) and 7.2040 (200 DMA). Resistance at 7.27, 7.2940 levels.

US Dollar (USD) could trade in a range, most likely between 7.2500 and 7.2900. In the longer run, current price movements are likely part of range trading, probably between 7.2400 and 7.2900, UOB Group’s FX analyst Quek Ser Leang and Lee Sue Ann note.  

Current price movements are likely part of range trading

24-HOUR VIEW: “We detected a ‘slight increase in momentum’ yesterday. We held the view that USD ‘could test the 7.2400 level before a more sustained rebound is likely.’ USD subsequently dropped to 7.2425 before staging a surprising strong rise, reaching a high of 7.2928. It then pulled back to close at 7.2807 (+0.27%). The price action provides no clarity. Today, USD could trade in a range, most likely between 7.2500 and 7.2900.”

1-3 WEEKS VIEW: “Our most recent narrative was from last Friday (06 Dec, spot at 7.2660), wherein ‘the current price movements are likely part of range trading, probably between 7.2400 and 7.2900.’ USD fell to 7.2420 two days ago. Yesterday, it rose slightly above 7.2900 (high of 7.2928). There has been no increase in either downward or upward momentum, and we continue to expect USD to trade between 7.2400 and 7.2900.”

• USD/CNH depreciates as PBOC-backed Chinese media reported that the Yuan remains stable and balanced.
• China's 10-year yield fell to 1.805%, with the spread between Chinese and US yields expanding to nearly 250 basis points.
• Traders await US November Producer Price Index data due on Thursday to gain fresh impetus.

USD/CNH retraces its recent gains from the previous session, trading around 7.2660 during the Asian hours on Thursday. PBOC-affiliated Chinese financial media reported that the Yuan remains stable and balanced. The People’s Bank of China (PBOC) set the central rate for USD/CNY, the Chinese Yuan onshore, for Thursday's trading session at 7.1854, compared to the previous day's fix of 7.1843.

Unnamed experts cited by the PBOC-backed media suggest that the possibility of the US Dollar (USD) weakening is increasing, aligned with expectations of the Federal Reserve (Fed) cutting rates in December. Consequently, the Chinese Yuan is expected to continue fluctuating in both directions under market forces.

On Thursday, Chinese long-term yields fell, expanding the yield disadvantage of 10-year treasuries against US counterparts to the widest level in over 22 years. China's 10-year yield dropped to a low of 1.805%, with the spread between China and US yields expanding to nearly 250 basis points, the largest gap since June 2002.

The offshore Yuan (CNH) faced challenges following reports that top leaders and policymakers in China considered letting the currency fall in response to an expected sharp hike in US tariffs, per Reuters. The tariffs could include a universal 10% import duty and a 60% duty on Chinese goods entering the United States (US).

On Tuesday, China President Xi Jinping stated, "China has full confidence in achieving this year's economic target." Xi emphasized that China will continue to serve as the largest engine of global economic growth and asserted that there would be no winners in tariff wars, trade wars, or tech wars.

US Dollar (USD) could test the 7.2400 level before a more sustained rebound is likely. In the longer run, current price movements are likely part of range trading, probably between 7.2400 and 7.2900, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Current price movements are likely part of range trading

24-HOUR VIEW: “We noted yesterday that USD ‘is under mild downward pressure and could edge lower to 7.2540.’ However, we were of the view that ‘the major support at 7.2400 is unlikely to be tested.’ USD subsequently fell more than expected to 7.2420 before rebounding to close at 7.2609, lower by 0.10%. There has been a slight increase in momentum. Today, USD could test the 7.2400 level before a more sustained rebound is likely. A sustained break below 7.2400 appears unlikely. On the upside, should USD break above 7.2750 (minor resistance is at 7.2660), it would suggest that USD is not weakening further.”

1-3 WEEKS VIEW: “Current price movements are likely part of range trading, probably between 7.2400 and 7.2900. Our most recent narrative was from last Friday (06 Dec, spot at 7.2660), wherein ‘the current price movements are likely part of range trading, probably between 7.2400 and 7.2900.’ Yesterday, USD dropped to a low of 7.2420 before rebounding. The slight increase in momentum is not enough to indicate a sustained decline. Looking ahead, if USD were to break clearly below 7.2400, it could trigger further decline to 7.2200.”

US Dollar (USD) is under mild downward pressure; it could edge lower to 7.2540. The major support at 7.2400 is unlikely to be tested. In the longer run, current price movements are likely part of range trading, probably between 7.2400 and 7.2900, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

The major support at 7.2400 is unlikely to be tested

24-HOUR VIEW: “While we noted ‘a slight increase in momentum’ yesterday, we were of the view that ‘this is likely to lead to a higher trading range of 7.2650/7.2900 instead of a sustained rise.’ USD then rose to 7.2927 before dropping sharply 7.2575. This time around, there has been a slight increase in downward momentum. Today, USD is likely to edge lower to 7.2540. The major support at 7.2400 is unlikely to be tested. Resistance is at 7.2760; a breach of 7.2830 would indicate that the current mild downward pressure has eased.”

1-3 WEEKS VIEW: “There is not much to add to our update from last Friday (06 Dec, spot at 7.2660). As previously indicated, ‘the current price movements are likely part of range trading, probably between 7.2400 and 7.2900.’ Note that while USD rose to 7.2927 yesterday, it pulled back quickly to close lower at 7.2685.”

USD/CNH continued to drift lower, thanks to recent news from politburo about ramping up support and also taking cues from daily fixing guidance. Policymakers continue to manage the daily fix, setting it below 7.20 and at times, even lower, when USD was even trading stronger. USD/CNH was last at 7.2519 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Daily momentum turns bearish

“Fixing pattern suggests that PBoC is doing whatever it takes to not only restraint the RMB from over-weakening but also to guide its bias and direction. Tariff may hurt RMB when it happens but that may be a story for 2025 after Trump inauguration. In the interim, we would keep a look out for the China’s CEWC meeting on 11-12 December.”

“Expectations are building up for stimulus support after politburo vowed to stabilise property and stock markets. Officials also pledged to ramp up ‘extraordinary counter-cyclical policy adjustment’ to support the economy and it also announced that it will embrace a “moderately loose” strategy for monetary policy in 2025. Follow-up policy action is crucial, and bear in mind markets are impatient. We caution that any delay in concrete policy action may setup a case for disappointment (again).”

“For now, we remain cautiously hopeful. And that would imply some support for Asian FX, including CNH, KRW, TWD, SGD and MYR. Daily momentum turned bearish while RSI fell. Risks are skewed to the downside. Support at 7.2340 (23.6% fibo retracement of Sep low to Dec high), 7.2040 9200 DMA), 7.18 levels (38.2% fibo, 50 DMA). Resistance at 7.27 levels.”

US Dollar (USD) is expected to trade in a 7.2650/7.2900 range. In the longer run, current price movements are likely part of range trading, probably between 7.2400 and 7.2900, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.  

USD is expected to trade in a 7.2650/7.2900 range

24-HOUR VIEW: “We expected USD to ‘trade in a 7.2550/7.2800 range’ last Friday. USD traded in a higher range of 7.2558/7.2869 before closing at 7.2846 (+0.29%). There has been a slight increase in momentum, but this is likely to lead to a higher trading range of 7.2650/7.2900 instead of a sustained rise.”

1-3 WEEKS VIEW: “There is not much to add to our update from last Friday (06 Dec, spot at 7.2660). As previously indicated, ‘the current price movements are likely part of range trading, probably between 7.2400 and 7.2900.’ Looking ahead, if USD breaks and stays above 7.3145, it would indicate that the start of a sustained rise.”

USD/CNH continued to drift lower, thanks to softer USD and taking cues from fixing guidance. Pair was last at 7.2737, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Corrective pullback likely

“Policymakers continue to manage the daily fix, setting it lower at 7.1848 vs. 7.1879 (yesterday). Fixing pattern continues to suggest that PBoC is doing whatever it takes to not only restraint the RMB from over-weakening but also to guide its bias and direction.”

“Tariff may hurt RMB when it happens but that may be a story for 2025 after Trump inauguration. Meantime, we would keep a look out for the CEWC meeting on 11-12 Dec.”

“Daily momentum is flat while RSI fell. Corrective pullback likely. Support at 7.2510 (21 DMA), 7.22 levels. Resistance at 7.32, 7.3450 levels.”

US Dollar (USD) is expected to trade in a 7.2550/7.2800 range. In the longer run, current price movements are likely part of range trading, probably between 7.2400 and 7.2900, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

USD to probably trade between 7.2400 and 7.2900

24-HOUR VIEW: “Following USD sharp pullback two days ago, we noted yesterday that ‘the decline appears to be running ahead of itself, and USD is unlikely to weaken much further.’ We expected USD to ‘trade in a 7.2630/7.2930 range.’ USD subsequently traded in a narrower range than expected (7.2631/7.2859). There has been no increase in either downward or upward momentum, and we continue to expect range trading, most likely between 7.2550 and 7.2800.”

1-3 WEEKS VIEW: “We turned positive in USD on Tuesday (03 Dec, spot at 7.2880), indicating the ‘rapid increase in momentum could lead to USD rising to 7.3115.’ After USD rose to 7.3145 and then pulled back sharply, we indicated yesterday (Thursday) that ‘upward momentum has slowed with the sharp pullback.’ We added, ‘if USD breaks below 7.2630 (no change in ‘strong support’ level), it would mean that it is not rising further.’ USD eased to a low of 7.2631 in NY trading. While our ‘strong support’ level has not been clearly breached yet, upward momentum has largely faded. The current price movements are likely part of range trading, probably between 7.2400 and 7.2900.”

USD/CNH continues to ease away from recent high as policymakers keep a strong grip on the daily fix, setting it even lower at 7.1879 vs. 7.1934 (yesterday). Pair was last at 7.2736.

Corrective pullback not ruled out

“USD/CNH eased away from recent high as policymakers keep a strong grip on the daily fix, setting it even lower at 7.1879 vs. 7.1934 (yesterday). This is despite USD trading largely rangebound.”

“Fixing pattern continues to suggest that PBoC is doing whatever it takes to not only restraint the RMB from over-weakening but also to guide its bias and direction. Tariff may hurt RMB when it happens but that may be a story for 2025 after Trump inauguration. Meantime, we would keep a look out for the CEWC meeting on 11-12 Dec.”  

“Daily momentum is flat while RSI shows signs of turning from near-overbought conditions. Corrective pullback not ruled out. Support here at 7.2460 (21 DMA). Resistance at 7.32, 7.3450 levels.”

US Dollar (USD) is expected to trade in a 7.2630/7.2930 range. In the longer run, upward momentum has slowed with sharp pullback; a breach of 7.2630 would mean that USD is not rising further, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Upward momentum has slowed with sharp pullback

24-HOUR VIEW: “On Tuesday, USD soared to a high of 7.3145. Yesterday (Wednesday), we stated that ‘despite being deeply overbought, the advance appears to have enough momentum to retest the 7.3145 level before a more sustained pullback can be expected.’ We added, ‘the next resistance at 7.3300 is not expected to come under threat.’ However, USD pulled back from a high of 7.3060, reaching a low of 7.2673. USD closed at 7.2789 (-0.27%). The decline appears to be running ahead of itself, and USD is unlikely to weaken much further. Today, we expect USD to trade in a 7.2630/7.2930 range.”

1-3 WEEKS VIEW: “We turned positive in USD two days (03 Dec, spot at 7.2880), indicating the ‘rapid increase in momentum could lead to USD rising to 7.3115.’ After USD surpassed the 7.3115 level, we highlighted yesterday (04 Dec, spot at 7.2975) that ‘momentum remains strong, and now that USD has broken above 7.3145, the next significant resistance level is at 7.3678, last year’s high.’ We did not expect the subsequent sharp pullback that reached a low of 7.2673. Upward momentum has slowed with the pullback. From here, if USD breaks below 7.2630 (no change in ‘strong support’ level), it would mean that it is not rising further.”

Overbought advance could retest the 7.3145 level before a more sustained pullback can be expected. Momentum remains strong; the next significant resistance is at last year’s high of 7.3678, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.  

Next significant resistance is at last year’s high of 7.3678

24-HOUR VIEW: “While we held the view that USD ‘may rise further and break above 7.3000’ yesterday, we indicated that ‘the major resistance at 7.3115 is likely out of reach for now.’ We underestimated the upward momentum, as USD soared to a high of 7.3145, easing off to close at 7.2985, higher by 0.17% for the day. Despite being deeply overbought, the advance appears to have enough momentum to retest the 7.3145 level before a more sustained pullback can be expected. The next resistance at 7.3300 is not expected to come under threat. On the downside, support is at 7.2860, followed by 7.2750.”

1-3 WEEKS VIEW: “We turned positive in USD yesterday (03 Dec, spot at 7.2880), indicating the ‘rapid increase in momentum could lead to USD rising to 7.3115.’ We did not expect USD to exceed the technical target as quickly, as it surged to a high of 7.3145. Momentum remains strong, and now that USD has broken above 7.3145, the next significant resistance level is at 7.3678, last year’s high. To sustain the momentum, USD must not break below 7.2630 (‘strong support’ level was at 7.2550 yesterday).”

USD/CNH eased as policymakers continued to keep the daily fix under 7.20. In fact, the CNY fix was even set stronger at 7.1934 than the day before (at 7.1996). Pair was last at 7.2838, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

CNH may still trade under pressure

“Fixing pattern suggests that PBoC is doing whatever it takes to restraint the RMB from over-weakening after the initial round of knee-jerk depreciation post-US election outcome. That said, tariff headlines served as a constant reminder that wider tariffs could soon hit when Trump comes on board officially in Jan2025. PBoC may continue to restraint the RMB from excessive weakening via daily fix, but likely they may have to deploy offshore funding squeeze (if need arises) to ensure more effective transmission.”

“CNH may still trade under pressure expectations for further rate cuts at home while economic recovery remains uneven. Caixin services PMI was weaker than expected while manufacturing PMI was stronger than expected. Housing market has also showed very mixed signs of stabilisation. While there may be other stimulus support measures to support the domestic economy, these are at best mitigating factors only.”

“Meantime the bias for RMB may be skewed towards further weakening (notwithstanding some short-term technical correction). Daily momentum is mild bullish while RSI shows signs of turning from near-overbought conditions. Corrective pullback not ruled out. Support at 7.2745 and 7.2440 (21 DMA). Resistance at 7.32, 7.3450 levels.”

The US Dollar (USD) may rise further and break above 7.3000; the major resistance at 7.3115 is likely out of reach for now. In the longer run, rapid increase in momentum could lead to USD rising to 7.3115, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Rapid increase in momentum can lead to 7.3115

24-HOUR VIEW: “We did not anticipate USD to lift off and surged to 7.2954 (we were expecting range trading). While conditions are deeply overbought, robust momentum suggests USD may rise further and break above 7.3000. The major resistance at 7.3115 is likely out of reach for now. To maintain the momentum, USD must stay above 7.2700, with minor support at 7.2780.”

1-3 WEEKS VIEW: “We highlighted last Thursday (28 Nov, spot at 7.2500) that the recent ‘upward momentum has faded.’ We also highlighted that ‘The current price action is likely part of a consolidation range, and we expect USD to trade between 7.2200 and 7.2800 for the time being.’ Yesterday, in a sudden move, USD took off and surged to a high of 7.2954. The rapid increase in momentum could lead to USD rising to the resistance at 7.3115. Looking ahead, a clear break of this level will shift the focus to 7.3678. On the downside, a breach of 7.2550 would mean that our positive USD view is incorrect.”

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.”

Weekend comments merely add another layer of tariff threats to China, ING’s FX analysts Chris Turner note.

USD/CNY set to test the upper 2% band of the onshore range

“Overnight, USD/CNH has pushed up to the highest levels since July as the People's Bank of China fixed USD/CNY close to 7.20.”

“It looks like USD/CNY will test the upper 2% band (7.3430 if fixings remain near 7.20) of the onshore range.”

Despite no significant increase in downward momentum, there is room for the US Dollar (USD) to edge lower to 7.2380. In the longer run, momentum has largely faded; USD is likely to trade between 7.2200 and 7.2800 for the time being, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

USD to edge lower to 7.2380

24-HOUR VIEW: “Two days ago, USD rose to 7.2730, then pulled back. Yesterday, we highlighted that ‘Upward pressure appears to have eased with the pullback.’ We added, ‘instead of continuing to advance, USD is more likely to trade in a sideways range of 7.2450/7.2660.’ USD then rose to 7.2695, dropped to 7.2425 before closing at 7.2479, lower by 0.15%. Despite no significant increase in downward momentum, there is room for USD to edge lower to 7.2380 before a rebound is likely. The major support at 7.2200 is unlikely to be tested. Resistance is at 7.2590, followed by 7.2660.”

1-3 WEEKS VIEW: “Two days ago (26 Nov, spot at 7.2630), we noted that ‘momentum is building again.’ We added, ‘USD could break above 7.2800, but it is too early to determine if 7.3115 is within reach.’ Since then, USD has not been able to make much headway on the upside. The buildup in momentum has largely faded. The current price action is likely part of a consolidation range, and we expect USD to trade between 7.2200 and 7.2800 for the time being. Looking ahead, USD has to break clearly above 7.2800 before a sustained advance is likely.”

Instead of continuing to rise, the US Dollar (USD) is likely to trade in a sideways range between 7.2450 and 7.2660. In the longer run, momentum is building again; USD could break above 7.2800, but it is too early to determine if 7.3115 is within reach, UOB Group’s FX analyst Quek Ser Leang and Lee Sue Ann note.

USD likely to trade between 7.2450 and 7.2660

24-HOUR VIEW: “After USD soared in early Asian trade yesterday, we indicated that ‘the sharp and swift rally appears to be overextended.’ However, we were of the view that ‘there is room for USD to test the major resistance at 7.2800 before levelling off.’ While USD rose as expected, it only reached a high of 7.2730 before pulling back. Upward pressure appears to have eased with the pullback. Today, instead of continuing to advance, USD is more likely to trade in a sideways range of 7.2450 and 7.2660.”

1-3 WEEKS VIEW: “Yesterday (26 Nov, spot at 7.2630), we noted that “momentum is building again.” We added, “USD could break above 7.2800, but it is too early to determine if 7.3115 is within reach.” We continue to hold the same view. On the downside, a breach of 7.2200 (no change in ‘strong support’ level), would mean that the USD strength from early this month has ended.”