Usdcnh To Consolidate

last updated on

Usdcnh To Consolidate

Usd/Cnh Will Stay In Consolidation - Uob Group

The UOB Group has issued a medium-term forecast for the USD/CNH. According to them, the USD/CNH pair will likely stay in consolidation for the next 2-3 months.

The consolidation range for the USD/CNH group is between 7.1000 - 7.1500. So for the next 2 to 3 months, you can expect the US Dollar and Chinese Yuan pair to stay in that range.

Us Dollar To Weaken Against Cnh

But if we talk about the long term, like 6 or more months, the preferred play will be US Dollar weakness. Almost everyone agrees that the US policies, tariffs, and the US Federal Reserve will result in a weaker dollar.

So once the US Dollar gets weaker on account of rate cuts & other risks, then the USD/CNH pair is likely to break out of its lower limit. That would be a sign of the CNH strength and a weakness in the greenback.

In the short term, the US Dollar may attempt a recovery against the CNH. But that will be short-lived as the US economy is going through a lot right now. So, this strength isn't something that can be sustained for the long term.

And once this upward momentum is gone, then the currency pair is highly likely to get out of range trading. For now, the relations between the US and China appear to be improving.

After all, both countries have agreed to the TikTok deal, and we have also seen a pause in the tariff wars. So, if this truce continues for the next 4-5 months, it could send the USD/CNH lower without any doubt.

But even the US government doesn't want a stronger US Dollar, and that's the key thing here. So, the US government and the US Federal Reserve are likely to adopt policies that will weaken the US Dollar.

So, the medium range for the USD/CNH is 7.1000 - 7.1500. For the long term, the USD/CNH is likely to break the 7.1000 support and move towards the 7.0500.

Trending Stories