PBoC: Steepening bias as industrial activity holds – DBS

💡 DMK Insight

The recent steepening in Chinese Yuan rates is a signal traders can’t ignore right now. With a ceasefire between the US and Iran, geopolitical tensions are easing, which could lead to increased trade flows and bolster the CNY. Coupled with stronger-than-expected Q1 growth in China, this creates a favorable environment for the Yuan. Traders should watch for potential upward momentum in the CNY against major currencies, especially if the growth trend continues. A key level to monitor is the psychological barrier around recent highs; a sustained break could trigger further bullish sentiment. But here’s the flip side: if geopolitical tensions flare up again or if China’s growth proves to be a one-off, we could see a rapid reversal. Keep an eye on economic indicators from both the US and China in the coming weeks, as they could provide clues about future movements. Watch for the next set of economic data releases that could influence sentiment and positioning in the forex market.