USD/CNH rises on China-Taiwan tensions amid blockade drills

USD/CNH has strengthened 0.2% to 7.3150 as risk-off sentiment emerges following China's announcement of "Justice Mission 2025" military drills around Taiwan. The exercises, featuring blockade-style operations and multi-directional naval approaches, have heightened geopolitical tensions in the Asia-Pacific region. Safe-haven demand for the US dollar increased as investors moved away from regional currencies amid escalating rhetoric framed as warnings against Taiwan independence. The offshore yuan weakened despite China's robust economic data released earlier this week, as geopolitical concerns overshadowed fundamental factors. Technical indicators show USD/CNH testing resistance at 7.3200, with momentum indicators suggesting further upside if tensions persist. Support remains at 7.3000 psychological level. Traders are monitoring for any escalation beyond scheduled drills, which could trigger additional yuan weakness and broader risk-off flows affecting Asian currency pairs.