USD/CNY at critical juncture as US-China tensions escalate

USD/CNY remains under pressure near 7.2500 as China's Vice President Han Zheng warns that bilateral relations have reached a 'critical juncture' following Track II dialogue meetings. The yuan has strengthened 0.2% against the dollar amid escalating trade concerns and diplomatic tensions between the world's two largest economies. Han emphasized the importance of mutual respect and peaceful coexistence, signaling Beijing's desire to avoid further deterioration in relations. Markets are closely monitoring developments as any breakdown in US-China cooperation could trigger risk-off sentiment, potentially strengthening the dollar as a safe haven while pressuring emerging market currencies. Technical indicators show USD/CNY testing support at 7.2450, with resistance at 7.2650. Traders should prepare for increased volatility as geopolitical headlines drive sentiment, with any positive breakthrough potentially weakening the dollar against the yuan.