USD/CNY reference rate expected at 7.1162 as PBOC manages yuan
The People's Bank of China (PBOC) is anticipated to set the USD/CNY reference rate at 7.1162, according to Reuters estimates ahead of the 01:15 GMT fixing. This projection represents a marginal adjustment from Friday's midpoint of 7.1155, suggesting continued controlled depreciation of the yuan. The PBOC maintains a managed floating exchange rate system, allowing USD/CNY to trade within a 2% band around the daily reference rate. Current spot USD/CNY trades at 7.1180, near the upper end of the expected band. The steady weakening reflects China's economic challenges and diverging monetary policies, as the PBOC maintains accommodative stance while the Federal Reserve keeps rates elevated. Technical analysis shows immediate resistance at 7.1200, with support at 7.1100. A break above 7.1200 could accelerate yuan weakness toward 7.1300, while any surprise PBOC intervention might cap further USD/CNY gains.
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