{"id":16648,"date":"2025-02-19T06:52:31","date_gmt":"2025-02-19T06:52:31","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=16648"},"modified":"2025-02-19T06:52:31","modified_gmt":"2025-02-19T06:52:31","slug":"offshore-yuan-falls-as-trade-tensions-escalates","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/offshore-yuan-falls-as-trade-tensions-escalates\/","title":{"rendered":"Offshore Yuan Falls as Trade Tensions Escalates"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/download-71-1024x559.png\" alt=\"\" class=\"wp-image-16651\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Key Points<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The offshore yuan (USD\/CNH) fell past <strong>7.28 per dollar<\/strong>, with the <strong>USD\/CNH hitting 7.28642<\/strong>.<\/li>\n\n\n\n<li>Trump announced <strong>25% tariffs<\/strong> on autos, semiconductors, and pharmaceuticals, fuelling trade war fears.<\/li>\n\n\n\n<li>Geopolitical concerns grew after Trump Jr. suggested the <strong>US should prepare for potential military challenges from China<\/strong>.<\/li>\n\n\n\n<li>China\u2019s <strong>home prices dropped 5% y\/y in January<\/strong>, marking the smallest decline since July 2024.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The offshore yuan weakened past <strong>7.28 per dollar<\/strong>, extending its losses for the third consecutive session as <strong>US-China trade tensions escalated<\/strong>. Market sentiment deteriorated following <strong>Donald Trump\u2019s announcement of 25% tariffs<\/strong> on key Chinese exports, reinforcing expectations of <strong>retaliatory measures from Beijing<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">China&#39;s retaliatory tariffs on the United States may cause US oil exports to decline in 2025 for the first time since the COVID pandemic, after growth plateaued last year <a href=\"https:\/\/t.co\/nTyIVI5Nhu\">https:\/\/t.co\/nTyIVI5Nhu<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1887394569437753482?ref_src=twsrc%5Etfw\">February 6, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Geopolitical Tensions Weigh on Market Sentiment<\/h2>\n\n\n\n<p>Risk-off sentiment intensified after <strong>Donald Trump Jr.<\/strong> stated that the <strong><a href=\"https:\/\/www.msn.com\/en-us\/news\/world\/trump-s-son-says-us-military-should-focus-on-china-avoid-war\/ar-AA1zjX4U?ocid=BingNewsSerp\" title=\"\">US should prepare for potential military challenges from China<\/a><\/strong> while maintaining diplomatic engagement. His remarks added another layer of geopolitical risk, further weakening market confidence.<\/p>\n\n\n\n<p>Traders have historically shifted to <strong>safe-haven assets<\/strong> during periods of heightened <strong>US-China tensions<\/strong>, with increased flows into the <strong>US dollar, <a href=\"https:\/\/finance.yahoo.com\/news\/gold-surges-past-2900-to-new-record-amid-tariff-threats-154324698.html\" title=\"\">gold<\/a>, and Treasuries<\/strong>. If tensions continue to escalate, emerging market currencies, particularly the <strong>yuan and other Asian currencies<\/strong>, could see further declines.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/1-5-1024x446.jpg\" alt=\"\" class=\"wp-image-16743\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: USD\/CNH extends gains to 7.2845, with resistance at 7.2864 and support at 7.2619, as seen on the&nbsp;<a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\">VT Markets app<\/a><\/em>.<\/p>\n\n\n\n<p><strong>USD\/CNH edges higher, closing at 7.2845 after opening at 7.2735.<\/strong> The session saw a high of 7.2864 and a low of 7.2731, with the pair extending its upside momentum as traders assess US-China economic dynamics.<\/p>\n\n\n\n<p>The <strong>moving averages (MA 5, 10, 30)<\/strong> indicate bullish momentum, with short-term MAs maintaining an upward slope above the longer-term trend. <strong>MACD (12, 26, 9)<\/strong> confirms this strength, with the histogram reflecting a recent bullish crossover, though a slight slowdown in momentum suggests a potential pullback or consolidation. <\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">China\u2019s Property Market Shows Signs of Stabilisation<\/h2>\n\n\n\n<p>Despite trade war concerns, China\u2019s latest property data showed <strong>a slower pace of decline<\/strong>. <strong>New home prices fell 5% y\/y in January<\/strong>, improving from <strong>December\u2019s 5.3% drop<\/strong>. This marked the <strong>smallest decline since July 2024<\/strong>, suggesting that <a href=\"https:\/\/finance.yahoo.com\/news\/china-property-beijings-stimulus-plan-093000251.html\" title=\"\">Beijing\u2019s stimulus efforts<\/a>, such as <strong>lower mortgage rates and funding for developers<\/strong>, may be starting to stabilise the sector.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">China&#39;s new home prices stagnate in January as sector struggles <a href=\"https:\/\/t.co\/jKvv3KPF3Y\">https:\/\/t.co\/jKvv3KPF3Y<\/a> <a href=\"https:\/\/t.co\/wByf357DRz\">pic.twitter.com\/wByf357DRz<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1892064117277561225?ref_src=twsrc%5Etfw\">February 19, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>However, <strong><a href=\"https:\/\/www.bloomberg.com\/news\/features\/2025-02-11\/china-s-real-estate-crisis-property-sector-debt-is-getting-worse\" title=\"\">structural weaknesses remain<\/a><\/strong>, with <strong>high developer debt and weak demand<\/strong> still limiting recovery prospects. Further <strong>policy measures may be needed<\/strong> to sustain momentum in the property sector.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Market Outlook<\/h2>\n\n\n\n<p>The <strong>offshore yuan remains vulnerable<\/strong>, with further depreciation likely if trade tensions escalate. <strong>USD\/CNH could test 7.30<\/strong>, especially if China retaliates against US tariffs.<\/p>\n\n\n\n<p>China\u2019s <strong>property sector shows tentative signs of stabilisation<\/strong>, but a full recovery remains uncertain. Market participants are closely watching <strong>Beijing\u2019s response to US trade policies<\/strong>, as any <strong>countermeasures could fuel another wave of market volatility<\/strong> across forex, commodities, and equities.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a><\/strong><strong>&nbsp;and&nbsp;<\/strong><strong><a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a><\/strong><strong>&nbsp;now.<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/www.vtmarkets.com\/#facebook\" rel=\"noreferrer noopener\" target=\"_blank\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Offshore yuan weakens past 7.28 as US tariffs escalate trade tensions. USD\/CNH nears 7.2865 amid rising geopolitical risks. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":66,"featured_media":16651,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[10,68],"class_list":["post-16648","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-forex","tag-yuan"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/16648","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=16648"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/16648\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16651"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=16648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=16648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=16648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}