CNY to suffer further downward pressure against the US dollar – MUFG

FXStreet Insights Team FXStreet

China has stepped up its economic stimulus. Furthermore, the People’s Bank of China (PBoC) has fixed the yuan stronger than model-based estimates had suggested. Nonetheless, economists at MUFG Bank expect the CNY to remain under pressure against the US dollar.

China growth concerns remain in focus

“The latest developments suggest that the fresh infrastructure stimulus announced will provide only a short-term boost for market sentiment towards the Chinese economy.

“The Chinese renminbi has strengthened following the PBoC’s decision to set a stronger expected daily fixing rate. It sends a signal to market participants that policymakers in China are unhappy about the recent faster pace of renminbi depreciation. The pushback from the PBoC is though unlikely to reverse the weakening trend that is currently in place.”

“Heightened concerns over economic weakness in China and the PBoC’s decision to lower rates further should keep downward pressure on the renminbi against the US dollar.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD struggles to regain momentum in the low1.1600s

EUR/USD is giving some signs of life in the aftermath of two severe days of losses on Wednesday, reclaiming the 1.1600 hurdle and above on the back of the resurgence of a mild selling bias around the US Dollar. Moving forward, the usual US weekly Claims will take centre stage on Thursday ahead of Friday’s crucial NFP data.

GBP/USD appears bid around 1.3370

GBP/USD reverses part of its recent multi-day decline, gathering some balance and managing to reach the 1.3400 region, where some initial resistance seems to have turned up. Cable’s uptick comes in response to some loss of momentum in the Greenback despite the geopolitical scenario remaining fragile.

Gold recovers modestly despite intensifying Middle East crisis

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.

XRP rises alongside peers as ETFs attract inflows

Ripple (XRP) is gaining upside momentum, trading above $1.40 at the time of writing on Wednesday. The remittance token is rising in tandem with major crypto assets, including Bitcoin (BTC), which has crossed above the pivotal $70,000 level, and Ethereum (ETH), which is holding above $2,000.

First Venezuela, now Iran: The US-China energy war escalates

At first glance, the latest escalation involving the United States with both Iran and Venezuela looks like another chapter in a long-running geopolitical story. But viewed through a broader strategic lens, something else may be unfolding: Energy.

Bittensor extends recovery despite retail demand slump

Bittensor, a leading Artificial Intelligence token, is aging up above $190 at the time of writing on Wednesday. Steady price increases characterise the broader crypto market, with Bitcoin holding above $71,000 and Ethereum above $2,000.