USD/CNH falls as Morgan Stanley, UBS boost China 2025 GDP forecasts

USD/CNH declined 0.2% to 7.2850 in early Asian trading as major investment banks upgraded their China growth outlook for 2025. Morgan Stanley and UBS both raised their GDP forecasts, citing expectations of stronger fiscal stimulus and improving domestic consumption trends. The yuan strengthened across the board, with EUR/CNH dropping 0.15% and GBP/CNH falling 0.18%. The upgrades come amid growing optimism about China's economic recovery and potential policy support measures from Beijing. Market participants are now closely watching for any signals from the People's Bank of China regarding monetary policy adjustments. Technical indicators show USD/CNH testing support at 7.2800, with a break below potentially targeting 7.2600. The improved growth outlook could attract foreign capital inflows, providing additional support for the yuan. Traders should monitor upcoming Chinese economic data releases and any policy announcements that could validate these upgraded forecasts.