{"id":18795,"date":"2025-03-20T05:53:45","date_gmt":"2025-03-20T05:53:45","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=18795"},"modified":"2025-03-20T05:53:45","modified_gmt":"2025-03-20T05:53:45","slug":"yuan-weakens-as-pboc-sets-softest-fixing","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/yuan-weakens-as-pboc-sets-softest-fixing\/","title":{"rendered":"Yuan Weakens as PBOC Sets Softest Fixing"},"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\/image_fx_-2025-03-20T135244.668-1024x559.png\" alt=\"\" class=\"wp-image-18798\" \/><\/figure>\n\n\n\n<p><strong>ey Points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>USD\/CNH climbs to 7.2391 as PBOC sets midpoint rate at 7.1754, its weakest since January 20.<\/li>\n\n\n\n<li>The dollar index (USDX) remains near a five-month low at 103.38, limiting USD strength.<\/li>\n\n\n\n<li>Resistance seen at 7.2410, with traders monitoring trade policy shifts and Fed guidance.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Yuan Eases as PBOC Signals Cautious Stance<\/h2>\n\n\n\n<p>The <strong>Chinese yuan weakened<\/strong> against the <strong>U.S. dollar<\/strong> on Thursday, with <strong>USD\/CNH rising to 7.2391<\/strong>, reflecting a <strong>0.12% decline in offshore yuan trading<\/strong>. The <strong>People\u2019s Bank of China (PBOC)<\/strong> set its <strong>midpoint rate at 7.1754 per dollar<\/strong>, marking its <strong>weakest fixing in two months<\/strong>. This move suggests that <strong>Chinese policymakers are keen to prevent excessive yuan appreciation<\/strong>, even as the dollar remains under pressure from weak economic data and ongoing trade uncertainties.<\/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 banks extended 1.01 trillion yuan ($139.66 billion) of new loans in February, well below analysts&#39; forecasts, according to Reuters calculations based on data released by the People&#39;s Bank of China (PBOC). <a href=\"https:\/\/t.co\/ACE8s3nYOk\">https:\/\/t.co\/ACE8s3nYOk<\/a> <a href=\"https:\/\/t.co\/NGOCgROUtK\">pic.twitter.com\/NGOCgROUtK<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1900661995981971590?ref_src=twsrc%5Etfw\">March 14, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Market participants see this as a <strong>strategic move ahead of <\/strong><strong><a href=\"https:\/\/www.whitehouse.gov\/presidential-actions\/2025\/01\/america-first-trade-policy\/\">U.S. trade policy reviews in April<\/a><\/strong>, as <strong>President Donald Trump\u2019s tariff stance<\/strong> continues to create uncertainty. Despite the <strong>dollar\u2019s 4% decline this month<\/strong>, the <strong>yuan has only appreciated by less than 1%<\/strong>, indicating that the <strong><a href=\"https:\/\/t.co\/LGbgGQJ4mt\">PBOC is actively managing its currency stance<\/a><\/strong> rather than allowing a rapid appreciation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The <strong>USD\/CNH<\/strong> pair is trading near <strong>7.23877<\/strong>, up <strong>0.17%<\/strong>, after hitting an intraday high of <strong>7.23911<\/strong>. The price is testing a <strong>key resistance level at 7.24105<\/strong>, which has acted as a ceiling in previous sessions. The <strong>moving averages (MA 5,10,30)<\/strong> show a bullish alignment, supporting the uptrend, while the <strong>MACD histogram<\/strong> signals increasing momentum.<\/p>\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\/image-19-1024x440.jpg\" alt=\"\" class=\"wp-image-18797\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: USD\/CNH extends gains but struggles near resistance, as seen on the <\/em><em><a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\">VT Markets app<\/a><\/em><\/p>\n\n\n\n<p>If <strong>USD\/CNH breaks above 7.241<\/strong>, further upside could push it toward <strong>7.245 or higher<\/strong>. However, failure to hold gains may result in a <strong>pullback toward support at 7.225<\/strong>. Traders should watch for <strong>China\u2019s economic updates and U.S. monetary policy cues<\/strong>, as they could drive further movement in the pair.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Market Sentiment and Future Outlook<\/h2>\n\n\n\n<p>Traders anticipate <strong>limited yuan appreciation beyond 7.22<\/strong>, barring any <strong>major shifts in economic data or trade policy<\/strong>. With the <strong>PBOC maintaining a controlled approach to currency fluctuations<\/strong>, further strengthening of the yuan may require <strong>stronger economic indicators or a shift in U.S.-China trade dynamics<\/strong>.<\/p>\n\n\n\n<p>Meanwhile, <strong><a href=\"https:\/\/www.reuters.com\/world\/china\/global-banks-raise-chinas-growth-forecast-ease-bearish-yuan-views-2025-03-20\/\">investment banks have raised their growth forecasts for China<\/a><\/strong>, leading to <strong>a more optimistic outlook on the yuan<\/strong>. This shift has softened <strong>bearish sentiment<\/strong>, as early signs of economic recovery bolster confidence in China\u2019s ability to sustain growth. Additionally, the <strong>PBOC\u2019s decision to <\/strong><strong><a href=\"https:\/\/www.cnbc.com\/2025\/03\/20\/china-keeps-lpr-steady-as-fed-hold-rates.html\">hold benchmark lending rates<\/a><\/strong><strong> steady for the fifth consecutive month<\/strong> aligns with market expectations, reinforcing a <strong>measured approach to monetary policy<\/strong> while maintaining <strong>stability in financial markets<\/strong>.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a><\/strong><strong> and <\/strong><strong><a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a><\/strong><strong> now.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>USD\/CNH nears 7.2410 resistance as yuan weakens; PBOC holds rates steady. Traders eye Fed policy and trade shifts for next move. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":18798,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[10,68],"class_list":["post-18795","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\/18795","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\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=18795"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/18795\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/18798"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=18795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=18795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=18795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}