USD/CNH extends decline as CNY fix hits 14-month low – OCBC

USD/CNH continues to drift lower amid a softer US Dollar (USD) and another strong CNY fix, with the PBoC guiding the RMB along a controlled appreciation path. USD/CNH last seen at 7.0536 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note, OCBC's FX analysts Frances Cheung and Christopher Wong note.

PBoC maintains steady appreciation pattern for RMB

"USD/CNH continued to trade lower, taking cues from a softer USD and lower USD/CNY fix. The fix was set at 7.0638, the lowest in 14 months."

"The fixing pattern remains consistentsince Apr-2025 and we view this as a deliberate move to steer the RMB on a gradual appreciation path while maintaining market order. Rapid appreciation is likely not what policymakers wish to see as that could lead to a rush for exporters to convert USD holdings (in turn resulting in disorderly appreciation or higher volatility)."

"Daily momentum is flat while RSI is near oversold conditions. Support here at 7.05, 7.0380 levels. Decisive break past these levels risk the pair overshooting towards 7. Resistance at 7.08 (21 DMA)."