China's Yuan Gradually Appreciates Against US Dollar Amid Softer Dynamics

The Chinese Yuan (RMB) has been experiencing a gradual appreciation bias against the US Dollar (USD), according to OCBC's analysis. The RMB and its offshore counterpart, CNH, have remained supported by softer USD dynamics and exporter conversions.

However, the People's Bank of China (PBoC) is signaling a preference for gradual gains through its fixing. This means that while the PBoC allows some appreciation, it is resisting an overly rapid or one-way move in the currency.

The USD/CNH has been trading with mild bearish momentum and oversold RSI, but the downside bias is tempered by the risk of a snapback around clearly defined support and resistance levels. The RMB ended the week near multi-year highs, but the fixing continues to signal some resistance to the pace of appreciation.