USDCNH trend reversal on the horizon? 🇨🇳

1:15 PM 21 January 2025

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. 

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

Share:
Back

Join over 1 600 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits