The USD/CNH pair maintained its position above the 7.2800 level on Thursday, despite fresh efforts by Chinese authorities to stabilize the yuan. Market participants largely shrugged off Beijing’s measures, including liquidity injections and verbal interventions, as the Chinese currency remained under pressure amid ongoing economic challenges.
The yuan’s weakness reflects persistent concerns over China’s economic recovery, which has been weighed down by sluggish growth data and a fragile property sector. While the People’s Bank of China (PBoC) has stepped in to support the yuan with policy adjustments, these actions have had limited impact on reversing the currency’s downward trajectory against the stronger U.S. dollar.
The dollar, bolstered by robust U.S. economic performance and hawkish Federal Reserve expectations, continues to outpace the yuan. Analysts pointed out that the divergence in monetary policies between the U.S. and China is contributing to the widening gap in currency performance, keeping USD/CNH elevated.
Looking ahead, the pair’s movement will likely hinge on further intervention measures from the PBoC and shifts in global economic sentiment. Until then, USD/CNH remains firm above 7.2800, with the broader narrative driven by contrasting economic conditions and policy stances between the two economies.
