USD/CNY: Gradual decline toward 6.7 – TD Securities

💡 DMK Insight

China’s strategy to maintain low USD/CNY volatility is a game changer for forex traders right now. With the 2026 Two Sessions approaching, the focus on stabilizing the Yuan could influence trading strategies significantly. Traders should watch for any signs of intervention or policy shifts that could affect the USD/CNY pair. If the Yuan strengthens, it might lead to a ripple effect across other currencies, particularly those linked to trade with China. For instance, a stronger Yuan could pressure commodity currencies like the AUD and CAD, as they often move in tandem with China’s economic performance. Keep an eye on key technical levels; if USD/CNY breaks below a significant support level, it could trigger further selling pressure on the dollar against the Yuan. The real story is how this stability could attract more institutional interest in Yuan-denominated assets, potentially reshaping market dynamics. Watch for any updates from Chinese authorities or economic indicators that could signal a shift in this strategy, especially as we approach the Two Sessions.