USD/CNY pushes above 7.30 for the first time since late 2023

With Trump continuing to threaten tariffs, one can reasonably expect the yuan to be China’s first line of defense against that. From last month:

• Is this Beijing’s first line of defense against Trump?
• China is considering to allow the yuan to weaken next year as trade risks loom – report

The case is certainly building and the question now isn’t if the yuan will weaken. But instead by how much will it weaken during the course of trading this year.

Beijing looked to have drawn a line in the sand in the past few weeks just under 7.30 but today, they’re starting to let that slide.

The 2023 high came in just under 7.35 and when we do get a run above that, there won’t be much of a precedent as that will take USD/CNY back to its highest levels since 2007 – just a few years after shifting to a “floating exchange rate” system.

This article was written by Justin Low at www.forexlive.com.