CNY: Hold your horses in 2026 – TD Securities

💡 DMK Insight

The CNY’s undervaluation could create trading opportunities, but don’t expect a quick revaluation. TD Securities’ report suggests that while the Chinese Yuan is undervalued, the anticipated revaluation might not happen as soon as traders hope. This is crucial for forex traders looking at CNY pairs, especially against the USD. If you’re holding long positions on CNY, be cautious; the market may not react as expected, and volatility could spike if economic indicators from China don’t align with bullish sentiment. Keep an eye on key economic data releases from China in the coming months, as they could provide insights into the Yuan’s trajectory. Also, monitor the USD/CNY pair closely—if it breaks above a certain resistance level, it could signal further weakness in the Yuan. On the flip side, if the market starts to price in a slower revaluation, it might create a buying opportunity for those looking to enter long positions at lower levels. Watch for any shifts in China’s monetary policy or trade relations that could impact the Yuan’s value significantly.