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USD/CNH consolidates after sharp drop as investors turn cautious

ING expects USD/CNH to edge lower over coming months toward 6.70, even as PBoC fixings slow and Iran sanctions risks draw attention.

Reported · Written up by our desk · Major Pairs

FXStreet reports that Chris Turner at ING says USD/CNH is consolidating after a sharp decline last week, with investors hesitant to buy renminbi at current levels.

According to ING, the pace of the PBoC’s lower USD/CNY fixings appears to be slowing, which may be reducing incentives to press renminbi gains.

The bank also points to concerns that a new round of US sanctions on Iran could disrupt economic cooperation between the US and China, with markets watching for potential spillovers.

ING’s base case remains for a gently offered US dollar, with USD/CNY drifting lower toward 6.70 over the coming months.

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