The USDCNH has declined from its global peaks after President Donald Trump did not mention China while discussing upcoming tariff policy plans. Today, the yuan gives up some of its gains (USDCNH: +0.4%), albeit with expectations of extreme tariffs already factored into the exchange rate, we could expect trend reversal for the Chinese currency.
The recent "friendly" conversation between Trump and Chinese leader Xi Jinping, along with the absence of specific tariff proposals on Chinese goods, resulted in a 1% appreciation of the yuan. Additionally, the currency is supported by recent macroeconomic data and a record issuance of 60 billion yuan in six-month coupons by the People's Bank of China.
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Currently, USDCNH is trading below both the 30-day Exponential Moving Average (EMA) and the lower boundary of the recent upward channel. A trend change will primarily depend on the Trump administration's decisions regarding tariff policy toward China; any outcome below market expectations will favor the yuan. A technical confirmation of a new direction would be the exchange rate rebounding from the 30-day EMA. Source: xStation5
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