China's Yuan drops to lowest since December 28

USD/CNY rises to 6.5552 - the highest level since December 28.
The Chinese currency is losing ground as the People's Bank of China (PBOC) cleared the way to inject US $100 billion.

Omkar Godbole FXStreet Contributor

The USD/CNY pair rose to 6.5552 on Tuesday - the highest level since December 28, possibly due to PBOC's liquidity injection.

The central bank on Sunday announced it would cut the amount of cash that some banks need to hold in reserve – known as the reserve requirement ratio. The move is seen infusing US $100 billion to help soften the blow from a trade battle with the US.

Further, the PBOC did not raise rates following US Fed's 25 basis point rate hike and the resulting widening of the rate differential could be playing a role in pushing CNY lower.

USD/CNY Technical Levels

Resistance: 6.5590 (Dec. 27 high), 6.57 (Oct 11 low), 6.5725 (Nov. 23 low).

Support: 6.5354 (Jan 10 high), 6.4749 (Jan. 8 low), 6.4355 (September 8 low).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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