Forex News
- GBP/USD holds near 1.3600, flat on a 32-pip range, 90 pips off the high.
- The Pound is up 2.2% since late July, the Dollar Index down 2.3%.
- Select committee hearings Thursday are the first BoE event since July 30.
GBP/USD holds near 1.3600 on Thursday, effectively unchanged at minus 0.05% across a range of barely thirty pips, a third session of drift beneath the high just short of 1.3700 posted earlier this week. The pair sits more than a cent above a steeply rising 50-day Exponential Moving Average (EMA) near 1.3450, and the daily Stochastic Relative Strength Index (Stoch RSI) above 90 has started to roll over.
The month is borrowed
Sterling has added roughly 2.2% against the Dollar since the last days of July, when the pair sat near 1.3300. Across the same stretch the Dollar Index has lost roughly 2.3%, falling from just beneath 101.50 to just above 99.00. The two figures differ by about a tenth of a percentage point, which accounts for the entire four-cent move on the other side of the quote.
The Bank of England has been on hold since July 30 and the next decision is September 17, so there has been no domestic policy event in five weeks for any of this to attach itself to. July inflation printed 2.9% with services easing to 3.4% and producer input prices falling, the labour figures softened, and none of it argued for urgency. The Pound has not been bought so much as the Dollar has been sold in front of it, which is a different trade with a different owner.
The posted gap explains none of it. Bank Rate sits at 3.75% against a US target range of 3.50% to 3.75%, so on the nominal spread the two are level, exactly as they were level at 1.3300. What moved is the expected gap, and it moved on the American side: a chair who has removed forward guidance entirely, three July dissents for a hike the committee did not deliver, and a market that has spent August deciding it cannot read the reaction function. Sterling's advantage this month is the absence of somebody else's.
The yield bidding Sterling is a charge
The conventional case rests on a real-rate advantage of roughly 62 basis points and long gilt yields holding above 5%, with the ten-year sitting some 35 to 45 basis points above its Treasury equivalent. Read as carry, that is a reason to own the currency. Read against a country carrying the second-lowest gross debt burden in the Group of Seven, it is a premium being charged rather than a return being offered, and the distinction decides whether the last four cents survive an autumn.
The bill arrives October 28. Borrowing across the first four months of the fiscal year already runs a couple of billion pounds beyond the official forecast, last month produced an unexpected deficit as inflation-linked staff costs consumed strong income tax receipts, and a government installed in July on a promise to use every inch of give inside the existing rules has to show the arithmetic in public. A currency bid on a term premium is long the exact thing that Budget tests.
The British side gets a microphone next week
Friday belongs entirely to the Dollar. The Fed Chair's first Jackson Hole keynote lands at 14:00 GMT as prepared text with no questions taken, sharing the minute with the preliminary annual benchmark revision to the establishment survey. The Chicago Purchasing Managers Index (PMI) precedes it at 13:45 GMT with a 57 consensus from 57.6 prior, and the final August Michigan readings hold at 51 on sentiment and 50.6 on expectations, with one-year inflation expectations at 4.3% and the five-year at 3.3%, each unchanged from the preliminary.
Next Thursday brings the first genuinely British event since July 30. Monetary Policy Report hearings put the committee in front of a select committee under questioning, which for a nine-member panel carrying three hike votes against a Governor resisting is a higher-information setting than any set-piece speech. The Governor then speaks at 08:50 GMT Friday, roughly four hours before August payrolls, where the prior print was minus 23K and unemployment 4.1%. The pair gets one day to establish a domestic reason and then hands itself straight back to the Dollar.
Levels
Resistance: The high just short of 1.3700 is the first line, with the 1.3700 handle immediately above it and 1.3750 the next mark on a break.
Support: 1.3550 is the near shelf and 1.3500 the one that matters, with the 50-day EMA near 1.3450 and the 200-day near 1.3400 beneath.
Bias: Bullish above 1.3500. The trend is intact with price more than a cent clear of both rising averages, but a Stoch RSI above 90 rolling over after a four-cent month argues for consolidation rather than extension into the keynote. Invalidation on a daily close beneath 1.3500, which puts the 50-day EMA in play.
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- NZD/USD holds just beneath 0.5950, unchanged on a 22-pip range.
- The RBNZ decision Wednesday carries a 2.75% consensus from 2.50%.
- Consumer confidence prints at 22:00 GMT against a 99.3 prior.
NZD/USD holds just beneath 0.5950 on Thursday, unchanged on the session across a range of twenty-two pips and some forty-five pips under the window high just short of 0.6000 set in early June. The pair sits close to ninety pips above a rising 50-day Exponential Moving Average (EMA) near 0.5850, with the 200-day a shade beneath that, and the daily Stochastic Relative Strength Index (Stoch RSI) near 65 with room above it.
The currency did the job the hike was for
The Reserve Bank of New Zealand raised the Official Cash Rate a quarter point to 2.50% on July 8, its first increase since 2023, and gave two reasons for it. The first was that 2.25% sat somewhat beneath neutral, so the move removed stimulus rather than applied restraint. The second was that standing still risked letting financial conditions loosen further, named explicitly as a softer currency or lower rate expectations.
The Kiwi has since climbed close to 5.7% from its early-July low just above 0.5600 and now trades within touching distance of its high for the window. A currency that strong tightens financial conditions without help, which retires the second of those two reasons before the September meeting arrives. Wednesday's consensus 2.75% would in any case leave the rate inside the Reserve Bank's own 2.50% to 3.50% neutral uncertainty band, so a second increase buys less accommodation rather than actual restraint.
Not all of the rally is the Dollar leaving, but most of it is. The Kiwi has added roughly 2.6% since the last days of July, when it traded near 0.5800, while the Dollar Index has lost roughly 2.3% across the identical stretch. That leaves something like a third of a percentage point that belongs to New Zealand rather than to Washington, and that fraction is the whole of what Wednesday has to justify.
The domestic case has been thinning
Headline inflation is now expected to have peaked at 3.9% in the June quarter and to fall to 3.3% in the September quarter. Surveys of households, businesses and professional forecasters all recorded lower inflation expectations in the September quarter, back to roughly where they sat before the oil spike. That is the entire case for a second increase moving in the wrong direction.
The activity side offers no more help. House prices ran 0.4% lower on the year in May, residential investment contracted in the March quarter despite strong consent growth, and the central bank's own nowcast for September-quarter growth sits at 0.6%. A committee that needed a casting vote to hold in May and then reached July's increase by consensus arrives at September with the data pointing away from the number the market has already paid for. Most major New Zealand banks still carry the rate near 3.00% by year-end on two more quarter-point moves, and the May projections implied a peak around 3.3%, so the distance between a fully priced Wednesday and a disappointed one runs through the track rather than the decision.
Sixty hours of its own story, then payrolls
The immediate mark is Thursday at 22:00 GMT, when consumer confidence prints against a prior of 99.3, beneath the hundred line separating net optimism from net pessimism. Building permits follow Tuesday at 22:45 GMT with a prior of minus 3.6%. The decision lands Wednesday at 02:00 GMT with the Monetary Policy Statement and policy review attached and a press conference an hour behind it, and the projected rate track rather than the number itself is the event.
Then the pair hands itself back. The US block runs the manufacturing survey Tuesday at 14:00 GMT with a 55.3 consensus from 55.6, the private payrolls estimate Wednesday at 12:15 GMT from 44K, the Beige Book that same evening at 18:00 GMT sixteen hours behind Wellington, the services survey Thursday from 54.1, and August payrolls Friday at 12:30 GMT with the prior at minus 23K and unemployment 4.1%. The Kiwi gets roughly sixty hours to trade its own story before a US labour print that last came in negative decides the rest of it.
Levels
Resistance: Just short of 0.6000 is the window high and the first line, with the 0.6000 handle immediately above it and little marked beyond.
Support: 0.5900 is the near shelf, then the moving-average band around 0.5850 where the 50-day and 200-day EMAs sit within fifteen pips of each other, with 0.5800 beneath that.
Bias: Bullish while 0.5900 holds, capped at 0.6000. The trend is clean with price above both rising averages and momentum unstretched, but the increase is already in the price, so the break needs the projected track rather than the decision. Invalidation on a daily close beneath 0.5850.
NZD/USD daily chart
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- USD/MXN edges higher as solid jobless claims support the US Dollar.
- Fed hawks keep tightening risks alive before Warsh speech.
- Hawkish Warsh tilt could push pair back above 17.00.
The Mexican Peso (MXN) loses ground modestly against the US Dollar (USD) on Thursday after economic data in the United States showed that the jobs market is solid, while inflation remains above the Federal Reserve’s (Fed) 2% goal. This suggests that higher interest rates are warranted, a tailwind for the Greenback. The USD/MXN pair trades near 16.97, up 0.09%.
USD/MXN rises modestly as traders await Warsh’s Jackson Hole speech
Price action shows that the Mexican currency has failed to gain traction over the last four trading days, perhaps awaiting Fed Chair Kevin Warsh's speech at Jackson Hole on Friday. In the meantime, solid economic data frm the United States (US) keeps the USD/MXN within familiar levels.
US data showed that jobless claims for the week ending August 22 were below estimates of 208K, coming in at 203K. This reaffirms the strength of the labor market, while the US trade deficit widened, according to the US.
Despite this, the US Dollar remained contained, as reflected in the US Dollar Index (DXY). The DXY, which measures the buck’s value versus six currencies, is flat at 99.14.
Market participants' focus is on what Fed Chair Kevin Warsh will say on Friday at Jackson Hole. Some of his colleagues spoke with the media, reaffirming their monetary policy stance,
Boston Fed Susan Collins commented that the recent PCE data did not change the overall outlook that the current monetary policy stance is restrictive, but recognised that a rate hike is “warranted if inflation disappoints,” via the WSJ.
Earlier, Cleveland Fed's Beth Hammack was hawkish, saying the job market is broadly in balance and adding that “now is the time to act” on tightening monetary policy.
Ahead of the Mexican economic docket, the US will see the release of the University of Michigan's Consumer Sentiment and Warsh's speech.
Given the backdrop, a hawkish tilt by Warsh can drive USD/MXN back above 17.00, paving the way for further gains. On the flip side, the pair can retest yearly lows below 16.90.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 16.9782, extending a bearish near-term tone as spot remains capped beneath the triple simple moving average cluster (50, 100 and 200-day SMA) at 17.3142 and the descending resistance trend line coming from 18.1651, which now projects around 17.3487. The latest 14-day Relative Strength Index at 34.55 hovers just above oversold territory, hinting that downside momentum is still dominant but could be losing some intensity as the pair consolidates below the aforementioned moving averages.
On the downside, the key structural floor emerges at the long-term trend-line break level near 15.47, which marks the next major support if selling resumes. On the topside, initial resistance is aligned at the triple SMA around 17.31, followed closely by the descending trend-line barrier at 17.35; only a sustained recovery above this resistance zone would ease the current bearish bias and open the way for a more meaningful rebound.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
BNY’s Geoff Yu highlights that the Bank of Korea’s 25bp hike to 3.00% and upgraded growth and inflation forecasts underline ongoing tightening risks. Robust exports and investment are supporting the economy, though stronger demand could fuel inflation and household debt. Yu continues to see undervalued APAC (Asia-Pacific) currencies such as South Korean Won (KRW) as preferred vehicles for expressing potential US Dollar (USD) weakness.
BoK tightening underpins Korean won
"The BoK raised its policy rate by 25bp to 3.00%, delivering a second consecutive hike as strong semiconductor demand lifts growth and adds to inflation pressure. The BoK raised its 2026 GDP forecast to 3.3% from 2.6% and its 2027 forecast to 2.9% from 2.1%; core inflation projections were also revised higher to 2.5% for both years."
"Policymakers highlighted robust exports, investment and gradually improving consumption, but warned that stronger demand could reinforce inflation, housing prices and household debt. The won strengthened after the decision, while the Kospi also rose. The BoK’s projections point to further tightening, though at a slower pace, suggesting the focus is shifting from front-loaded hikes toward more measured normalization."
"We continue to see undervalued APAC currencies such as KRW as the best expression of potential dollar weakness, rather than G10 names."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
OCBC Bank strategists Sim Moh Siong and Christopher Wong note that USD/SGD traded slightly firmer as resilient US data halted US Dollar downside pressure, though the pair remains subdued and rangebound ahead of Chair Warsh’s Jackson Hole speech. Daily momentum remains mildly bearish, but RSI is turning higher from near-oversold conditions, leaving room for some near-term upside in USD/SGD and therefore downside risks for the Singapore Dollar. Resistance is seen at 1.2740 and 1.2780/90, with support at 1.2680 and 1.2650.
Rangebound trade before Jackson Hole
"USD/SGD traded a touch firmer overnight as resilient US data halted USD downside pressure."
"That said, the pair continues to trade in subdued and within recent range, as markets await catalysts later this week – Chair Warsh’s speech at Jackson Hole later this Fri (10pm SGT)."
"Pair was last seen at 1.2720 levels. Mild bearish momentum on daily chart intact but RSI shows signs of rising from near oversold conditions. Some upside risks not ruled out in the interim."
"Resistance at 1.2740 levels (61.8% fibo retracement of 2026 low to high), 1.2780/90 levels (50% fibo, 21 DMA). Support at 1.2680 (76.4% fibo), 1.2650."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s (BBH) Elias Haddad sees the Philippine Peso underperforming its Asian peers after the Bangko Sentral ng Pilipinas (BSP) delivered a third consecutive 25 bps rate hike to 5.00%. Despite the BSP describing the move as preemptive, Haddad argues that policy remains behind the curve as inflation stays above the central bank’s tolerance band, markets price further tightening, and negative real rates continue to weigh on PHP.
Philippine Peso seen underperforming
"Philippine central bank (BSP) delivered a third straight 25bps hike to 5.00%.Most analysts polled by Bloomberg (20 of 25) had an increase penciled in, the rest expected a hold."
"According to the statement, today’s hike was a “preemptive monetary action” against upside price risks from “severe El Niño conditions on agricultural prices” and “potential wage adjustments.”"
"The markets imply nearly 75bps of tightening over the next 12 months, but negative real rates should keep PHP lagging its Asian peers."
"However, with inflation already above the bank’s 4% upper tolerance band, the move looks more reactive than preemptive and leaves policy behind the curve."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
DBS Group Research economist Radhika Rao notes that Indonesia’s parliament has held fit-and-proper hearings for BI Governor nominee Destry Damayanti, who signalled continuity, robust policy tools and stronger coordination with fiscal authorities. Onshore markets have turned more constructive, with USDIDR easing off July highs and the bond curve steepening as foreign investors return to IDR debt.
Governor nominee underpins market confidence
"Indonesia’s parliament held the fit-and-proper hearings for the BI Governor nominee Destry Damayanti on Wednesday. In early remarks at the session, she emphasized that the central bank had a robust mix of monetary, macroprudential and payment system tools at its disposal. Importance of policy synergy and coordination with the government and related agencies were also highlighted."
"Onshore markets turned more constructive this month, amid easing concerns over policy uncertainty, stability in the currency and affirmative remarks on the fiscal outlook. The growth outlook is also supportive, besides a manageable inflation profile. Policy packages by BI in June-July introduced enhancements to hedging activity, providing swap incentives and broadening those linked to local currency transactions."
"This signalled a shift in the central bank’s focus from purely rate hikes to non-rate measures to support the rupiah. USD/IDR is off July highs to hover within 17700-17900, helped also by the broader USD pullback (IDR up +1.6% in Aug). The bond curve has retained a steepening bias with the 10Y yield back around 7% tracking global cues, while the short-to-belly papers continue to benefit from a lower frequency of SRBI auctions and pricing out of further policy tightening expectations."
"Foreign investors have turned positive on IDR debt, with nearly $1bn inflows in Aug yet far (ownership at ~13% of outstanding issuance), besides strong appetite by retail and onshore institutions. We expect the steepening bias to sustain as the incoming Governor is unlikely to act until FX or inflation pressures resurface."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank FX Analyst Charlie Lay reports USD/THB has eased from around 33.90 in late July to about 32.70, helped by a softer Dollar. The Bank of Thailand sees recent baht volatility as driven by Middle East risks and Fed expectations, and Commerzbank looks for near-term consolidation in USD/THB around the 32.50–33.00 range.
Baht seen consolidating near term
"The Bank of Thailand (BoT) maintained the benchmark one-day repurchase rate unchanged at 1.00% as expected and for the third consecutive meeting. The Monetary Policy Committee (MPC) voted unanimously, 7-0 vote. BoT kept an accommodative bias and appears comfortable staying on hold for an extended period, possibly up to H1 2027. "
"We expect BoT to remain on hold for the rest of 2026, with the current policy setting providing sufficient support to growth while inflation expectations remain anchored. "
"The bias is arguably still toward accommodation rather than tightening, although BoT has emphasised that rate cuts are not warranted under current conditions and that monetary-policy transmission is becoming less effective."
"For USD/THB, the pair has moderated from around 33.90 in late July to about 32.70, aided by the softer USD. BoT noted that recent baht volatility has largely reflected Middle East developments and changing expectations for the Fed."
"Given the still-fragile domestic recovery, excessive THB appreciation would be undesirable, although the MPC gave no indication of a policy shift in response to the currency. We look for consolidation in USD/THB in the near term around 32.50-33.00."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s (BBH) Elias Haddad highlights USD/KRW near a one‑year low after the Bank of Korea (BoK) delivered a back‑to‑back 25bps hike to 3.00%. While guidance was tempered, the policy path implied by officials and swaps is higher, and Haddad argues Korean Won (KRW) fundamentals are positive, with undervaluation, a large current account surplus and expected foreign bond inflows.
Korean Won supported by strong fundamentals
"USD/KRW is holding near a one year low. Bank of Korea (BOK) delivered a back-to-back 25bps hike to 3.00%. Most analysts polled by Bloomberg (14 of 22) had a hike penciled in, the rest expected a hold."
"BoK hawkish guidance was tempered. The statement scrapped the line that “it is judged that it will be necessary to continue a policy stance consistent with further rate hikes,” reiterating instead that it “will determine the timing and pace of further Base Rate hikes based on incoming data.”"
"Its six-month ahead conditional policy rate projection shows six members at 3.50%, ten at 3.25%, and five at 3.00%. The swaps curve implies a policy rate closer to 3.50% in the next six months and 3.75% in the next twelve months."
"Overall, KRW fundamentals are positive. KRW is significantly undervalued, South Korea has a massive current account surplus (9.4% of GDP in Q1), full WGBI inclusion by November should sustain foreign bond inflows, and BOK has scope to deliver more hikes."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
OCBC Bank strategists Sim Moh Siong and Christopher Wong highlight that USD/CNH has edged higher alongside a broader US Dollar (USD) rebound and firmer US Treasury yields, while the People's Bank of China (PBoC) continues to prefer a gradual appreciation path. Mild bearish momentum persists but a modest rebound cannot be ruled out, with resistance at 6.7410–6.75 and support at 6.72–6.70. Geopolitical risks around Iranian Oil and potential secondary sanctions could add Renminbi (RMB) volatility.
PBoC keeps RMB gains controlled
"USD/CNH edged higher as the broader USD recovered and US Treasury yields ticked up overnight, though the move remained relatively contained."
"Beyond the near-term macro backdrop, renewed US pressure on Iran adds another source of uncertainty for RMB given China’s role as a major buyer of Iranian oil."
"USD/CNH last seen at 6.7225 levels. Mild bearish momentum on daily chart intact though RSI is showing tentative signs of turning higher from oversold conditions. Modest rebound not ruled out. Resistance at 6.7410 (21 DMA), 6.75 levels. Support at 6.72, 6.70 levels."
"The immediate FX impact should remain limited so long as measures stop short of directly targeting major Chinese financial institutions, but any escalation in secondary sanctions towards Chinese firms or banks could weigh on sentiment and introduce more two-way volatility."
"Separately, the PBoC continues to signal a preference for a measured pace of appreciation through a sizeable fix-versus-expectation gap, suggesting policymakers remain wary of allowing RMB strength run too quickly."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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