Skip to content USDCNH Analysis – 22-October-2024
The offshore yuan held steady at 7.13 against the dollar following the People’s Bank of China’s latest decision to lower interest rates to remarkable levels. This adjustment didn’t trigger much market response.
The USD/CNH 4-hour chart below demonstrates the price, support, and resistance levels.
PBOC Cuts Loan Prime Rates by 25 bps
The one-year Loan Prime Rate (LPR), which determines the interest rates for most business and personal loans, was reduced by 25 basis points (bps). Similarly, the five-year LPR, crucial for setting mortgage rates, was decreased by 25 bps to 3.6%.
These changes align with PBOC Governor Pan Gongsheng’s previous hints about possible cuts ranging from 20 to 25 bps and discussions on potentially lowering the Reserve Requirement Ratio (RRR) for commercial banks in the last quarter of 2024.
China’s Q3 GDP Growth Exceeds Forecasts at 4.6%
Recent data from China’s third quarter shows a GDP growth of 4.6% year-on-year, which modestly surpasses analyst forecasts. Retail sales in September increased by 3.2%, and industrial output grew by 5.4%. The unemployment rate improved, reaching a three-month low of 5.1%.
Despite these positive indicators, the real estate market remains troubled, with new home prices in 70 major cities recording a 15th consecutive monthly decline. Prices dropped by 5.7% compared to last year, marking the most significant fall since May 2015.
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