USD/CNY faces pressure as PBOC defends yuan amid tech restrictions

USD/CNY trading remains under scrutiny as the People's Bank of China (PBOC) actively defends the yuan's stability, prioritizing currency strength over export competitiveness. China's recent ban on foreign AI chips in state-funded data centers aims to boost domestic semiconductor development, potentially affecting tech sector capital flows. Asian equity markets traded broadly higher during the session, with risk sentiment improving across the region. The PBOC's intervention signals commitment to preventing excessive yuan weakness, which could limit USD/CNY upside moves. Meanwhile, the ECB's Annual Conference on Money Markets in Frankfurt draws attention to European monetary policy developments. Technical levels show USD/CNY facing resistance near recent highs, while support emerges from PBOC's defensive stance. Traders should monitor China's policy shifts and any spillover effects on regional currencies, particularly as geopolitical tensions around technology restrictions could influence broader Asia-Pacific forex dynamics.