The Chinese yuan holds firm against the U.S. dollar, closing at 7.27723, reflecting a 0.17% increase as markets absorbed the Trump administration’s proposal for a 10% tariff on Chinese imports.
According to Mizuho Securities Asia’s FX strategist Ken Cheung, the market’s relatively muted reaction suggests that the tariff announcement aligns with expectations, in contrast to Trump’s earlier campaign pledge of imposing 60% tariffs.
Cheung noted that Trump’s recent phone call with Chinese President Xi Jinping has bolstered optimism, as investors anticipate a possible reopening of trade negotiations. The avoidance of more severe tariffs has eased downward pressure on the yuan, contributing to its relative stability.
Picture: USDCNH shows moderate bullish momentum, trading near key resistance levels, as seen on the VT Markets app.
The USDCNH pair closed at 7.27723, marking a 0.17% increase, with intraday movements between 7.26136 and 7.28948, indicating moderate bullish momentum. The moving averages (MA 5,10,30) suggest consolidation, as shorter MAs hover around the 30-period MA.
The MACD (12,26,9) shows weakening bullish momentum, with the histogram turning negative. Resistance is at 7.29618, and support at 7.25189.
A breakout above the resistance level could open the door for further gains, but sentiment remains cautious. Recent economic data from China, including stronger GDP and export figures, have provided support to the offshore yuan, influencing the pair’s movement.
Market participants will closely monitor any developments in U.S.-China trade negotiations, with a focus on potential revisions to the tariff strategy. For now, the yuan’s resilience indicates that traders are careful, yet optimistic that trade tensions may not escalate further.
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