The US dollar remained firm against the Chinese yuan, with USD/CNH trading near 7.3150, as investors assessed global economic risks and the outlook for US monetary policy. The pair maintained its bullish tone, supported by steady US Treasury yields and ongoing concerns over China’s economic recovery.
The yuan faced pressure as sentiment around China’s economic outlook remained fragile. Weakening industrial output and sluggish consumer demand have raised concerns about Beijing’s ability to sustain growth, despite continued policy support from the People’s Bank of China (PBoC). The central bank’s efforts to stabilize the currency have helped limit downside risks, but confidence in a stronger recovery remains uncertain.
Meanwhile, the US dollar held steady, backed by expectations that the Federal Reserve will keep interest rates elevated in the near term. Despite some signs of economic cooling, hawkish Fed commentary has reinforced speculation that rates could stay high longer, keeping the greenback in demand.
From a technical perspective, USD/CNH remains in an uptrend, with the 7.3150 level acting as a key support zone. If bullish momentum continues, the pair could test higher resistance levels, while any pullback may find buyers on dips, given the prevailing macroeconomic backdrop.
Looking ahead, traders will focus on US inflation data and key Chinese economic indicators for further direction. A strong US consumer price index (CPI) report could reinforce Fed rate expectations, boosting the dollar, while any signs of improving Chinese data could provide relief to the yuan.
For now, USD/CNH maintains its bullish bias, with market uncertainty and diverging central bank policies keeping upward pressure on the pair. Unless China’s economic outlook improves significantly, the yuan may remain under pressure in the near term.
