{"id":18903,"date":"2025-03-21T07:12:31","date_gmt":"2025-03-21T07:12:31","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=18903"},"modified":"2025-03-21T07:12:31","modified_gmt":"2025-03-21T07:12:31","slug":"offshore-yuan-depreciates-on-strong-us-dollar","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/offshore-yuan-depreciates-on-strong-us-dollar\/","title":{"rendered":"Offshore Yuan Depreciates on Strong US Dollar"},"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-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/download-51-1024x559.png\" alt=\"\" class=\"wp-image-18904\"\/><\/figure>\n\n\n\n<p><strong>Key Points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The USDCNH (offshore yuan) weakens past <strong>7.25 <\/strong>per dollar<\/li>\n\n\n\n<li>US dollar strength driven by Powell&#8217;s remarks on interest rates<\/li>\n\n\n\n<li>PBOC <strong>scales back support <\/strong>for yuan through midpoint fixings, keeping<strong> key lending rates unchanged <\/strong>for March 2025<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Offshore Yuan Hits Lowest Level in Over a Week<\/h2>\n\n\n\n<p>The offshore yuan depreciated beyond <strong>7.25<\/strong> per dollar on Friday, hitting its lowest point in over a week, largely due to the US dollar\u2019s continued strength. The greenback saw a rise, bolstered by comments from Federal Reserve Chair Jerome Powell, who noted that the Fed is in no rush to cut interest rates, which fueled dollar demand. The <strong>USD\/CNH<\/strong> rate was at <strong>7.25255<\/strong> as of the latest data, with a high of <strong>7.25963<\/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\">The Federal Reserve will be in no rush to cut interest rates while it waits for more clarity on how the policies of the new Trump administration affect the economy, Chair Jerome Powell said <a href=\"https:\/\/t.co\/3ctv6xzjXv\">https:\/\/t.co\/3ctv6xzjXv<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1898072661877526601?ref_src=twsrc%5Etfw\">March 7, 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\">PBOC Scales Back Support for Yuan, Maintains Interest Rates<\/h2>\n\n\n\n<p>The People&#8217;s Bank of China (PBOC) has <strong>reduced its support for the yuan<\/strong> by <strong>scaling back its daily midpoint fixings<\/strong>, signaling its intent to prevent sharp depreciation against the US dollar. Traders view this as a sign of reduced intervention in the currency market.<\/p>\n\n\n\n<p>On the monetary policy front, the PBOC <strong>kept key <a href=\"https:\/\/www.centralbanking.com\/central-banks\/monetary-policy\/7972537\/china-holds-loan-prime-rates-again\" target=\"_blank\" rel=\"noopener\" title=\"\">lending rates unchanged for the fifth consecutive month<\/a> <\/strong>in March 2025, in line with market expectations. The one-year loan prime rate remains at <strong>3.1<\/strong>%, while the five-year rate holds at <strong>3.6<\/strong>%. Both rates are at historic lows, following cuts in October and July 2024. The PBOC has left the door open for future rate adjustments and changes to the reserve requirement ratio.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Outlook<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"450\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/21.3_2-1024x450.jpg\" alt=\"\" class=\"wp-image-18905\"\/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: USDCNH tests resistance at 7.25357 after a steady rise from 7.22547, as seen on the&nbsp;<a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\" target=\"_blank\" rel=\"noopener\" title=\"\">VT Markets app<\/a>.<\/em><\/p>\n\n\n\n<p>The offshore yuan (USDCNH) increased by <strong>0.03<\/strong>%, closing at <strong>7.25255 <\/strong>after opening at <strong>7.25068<\/strong>. The session saw a steady upward movement, reaching a high of <strong>7.25963 <\/strong>before retracing slightly and closing just below the day&#8217;s peak.<\/p>\n\n\n\n<p>The moving averages (MA 5,10,30) show strong bullish momentum, with short-term MAs consistently above the longer-term MAs. This indicates a continued upward trend. Additionally, the MACD (12,26,9) shows positive momentum, with the histogram expanding and the MACD line (blue) above the signal line (yellow), supporting the bullish outlook.<\/p>\n\n\n\n<p>Key levels to monitor include <strong>7.25357 <\/strong>as immediate resistance and <strong>7.24597 <\/strong>as key support. A break above resistance could signal further upside momentum, while a drop below support may shift the sentiment to a more neutral or bearish stance.<\/p>\n\n\n\n<p>Despite <strong>recent strength in the U.S. dollar<\/strong>, driven by positive economic data and expectations of tightening monetary policy, the <strong>offshore yuan remains under pressure. <\/strong><\/p>\n\n\n\n<p>However, <strong>ongoing efforts from the Chinese government to stimulate the economy and stabilize the currency <\/strong>may offer potential for a rebound. Market participants should monitor any policy shifts from the People\u2019s Bank of China and further developments in U.S.-China relations for potential turning points.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a>&nbsp;now.<\/strong><a href=\"https:\/\/www.vtmarkets.com\/#facebook\" target=\"_blank\" rel=\"noreferrer noopener\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The offshore yuan depreciates past 7.25 per dollar as US dollar strength grows, with Powell\u2019s remarks and PBOC\u2019s reduced support adding to pressure. -vtmarkets.com<\/p>\n","protected":false},"author":66,"featured_media":18904,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[9,10,68],"class_list":["post-18903","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-dollar","tag-forex","tag-yuan"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/18903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=18903"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/18903\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/18904"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=18903"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=18903"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=18903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}