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Stronger yuan fix under 6.80 lifts expectations for gradual RMB gains

OCBC says USD/CNH fell after the USD/CNY fix was set at 6.7989, and notes support near 6.75-6.76 and resistance at 6.80 and 6.8320.

Reported · Written up by our desk · Central Banks

OCBC strategists Sim Moh Siong and Christopher Wong said USD/CNH dipped after China set a stronger daily fixing level for the USD/CNY pair below 6.80, the first time that threshold has been seen since February 2023.

They interpret the move as evidence policymakers are comfortable with continued RMB appreciation, while still managing the pace of gains.

The strategists pointed to the gap between the fixing and market expectations, saying the fix at 6.7989 was weaker than Bloomberg consensus for 6.7938, and that the size of such gaps will remain important when gauging the PBoC’s bias.

On the technical side, they cited mild bullish momentum for USD/CNH on the daily chart, with support at 6.75-6.76 and resistance at 6.80 and 6.8320.

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