Skip to content USDCNH Analysis – 15-October-2024
Recently, the offshore yuan fell to a new low of 7.13 against the dollar, marking its weakest point in more than a month. This drop comes as the US dollar gains strength, driven by anticipations that the Federal Reserve may slow down its rate cuts in the upcoming months.
The USD/CNH 4-hour chart below demonstrates the price, support, and resistance levels.
Impact of China’s Economic Data
China’s economic performance didn’t meet expectations and contributed to the yuan’s decline. The latest reports show a decrease in exports and imports, contrary to what analysts had predicted.
Over the past weekend, China’s consumer price inflation was reported lower than anticipated, reaching its smallest increase since June. This situation underscores the urgency of the Chinese government’s more decisive actions to support economic growth.
Extended Producer Deflation
The producer price index in China has been deflationary for two consecutive years, indicating ongoing challenges in domestic market demand despite numerous efforts by the authorities to boost the economy.
Sentiment around the yuan was further weakened following a briefing from China’s Finance Ministry. The details about the planned fiscal stimulus were seen as insufficient and unclear, failing to lift confidence in economic recovery measures.
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