USDCNH Analysis – December-14-2023

USDCNH Analysis - December-14-2023

The USDCNH (offshore yuan) rose to approximately 7.14 against the dollar, approaching its highest point in six months. This increase is primarily attributed to the weakening US dollar, which responded to the Federal Reserve’s recent projection of three interest rate cuts in 2024. According to the Fed’s “dot plot,” the expected funds rate by the end of next year is 4.6%, significantly lower than the previous 5.1% estimate.

In China, investors are closely monitoring the economic landscape following a critical policy meeting of top Chinese officials this week. Although the meeting did not set a specific growth target, it highlighted a focused approach to boosting domestic demand and implementing comprehensive fiscal and monetary policies for growth. Investors await further insights from upcoming data on Chinese industrial production, retail sales, and unemployment. Additionally, decisions on the medium-term lending rate by the People’s Bank of China next week are highly anticipated.

USDCNH Analysis - December-14-2023

USDCNH Analysis 4-H Chart