USD/CNY Steady at 6.8909 as Oil Dips, Geopolitical Risks Weigh

The Asia-Pacific FX session saw modest movements as oil prices drifted lower amid heightened geopolitical tensions in the Middle East, with a projectile striking near Iran's Bushehr nuclear plant without causing damage. The PBOC set the USD/CNY mid-point at 6.8909, while Chinese firms are ramping up FX hedging as yuan strength threatens export earnings, suggesting official tolerance for a stronger CNY. India is coordinating with Iran to secure fuel shipments through the Strait of Hormuz, underscoring regional supply risks. On the macro front, the Fed is set to hold rates steady, with Deutsche Bank noting geopolitics are clouding the policy outlook. Barclays flagged the strongest stock buy signal in a year as sentiment resets, potentially supporting risk-sensitive currencies like AUD and NZD. China's approval of Nvidia H200 AI chip sales signals easing US-China tech tensions, a modest positive for trade-sensitive pairs. Traders should monitor oil price volatility and central bank communications for near-term directional cues across Asia-Pacific FX.