CNY: What’s been driving a stronger renminbi? – MUFG
Source Fxstreet
The main economic data release overnight was the latest CPI report from China for July, MUFG FX analyst Lee Hardman notes.
USD/CNY rises back towards the 7.1800 level
“The report revealed that headline inflation picked up modestly by 0.3 points to 0.5% in July. The core measure on inflation fell to 0.4% in July from 0.6% in May-June. The release of the latest PPI report revealed that producer price deflation continued as it fell by an annual rate of -0.8% in July. Overall, the inflation developments alongside the recent loss of growth momentum in Q2 will keep pressure on the PBoC to lower rates further his year.”
“The renminbi has given back some of its recent gains over the past week. After hitting an intra-day low of 7.1153 om 5th August, USD/CNY has since risen back towards the 7.1800-level. The renminbi has benefitted alongside the yen and other Asian currencies from the recent bout of position liquidation as popular short positions have been pared back.”
“It has meant that the renminbi has strengthened following the PBoC’s decision to cut rates further towards the end of last month. While yields in China have continued to fall over the past month, it has been more than offset by the larger drop in US yields as market participants have moved to price in a higher probability of more aggressive Fed rate cuts.”
Disclaimer: For information purposes only. Past performance is not indicative of future results.
Recommended Articles
Prioritize filling the $27,000 gap and even try higher.
Insights – On November 21, Chinese e-commerce giant Pinduoduo (PDD) will release its Q3 2024 earnings.
Bitcoin briefly loses 2025 gains as crypto plunges over the weekend.Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
After a turbulent 2025, what lies ahead for commodities, forex, and cryptocurrency markets in 2026?
Gold Price Forecast: Does Gold Falling Below $4,000 Mean the Bull Market Is Over? Will It Still Rise in the Second Half of 2026?Heading into the second half of 2026, the gold market has transitioned from a strong-performing asset at the start of the year into one pulling back from its highs. Recently, gold prices
Heading into the second half of 2026, the gold market has transitioned from a strong-performing asset at the start of the year into one pulling back from its highs. Recently, gold prices
Related Instrument
