CNH continued to trade under pressure amid expectations for further rate cuts at home while economic recovery remains uneven. Pair was last at 7.3013, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

PBoC may continue to restraint the RMB

“US tariffs can further hurt RMB. Yesterday, President Biden fired a parting shot in tightening curbs on China’s access to AI memory and chips tools. Recent tariff headlines served as a constant reminder that wider tariffs could soon hit when Trump comes on board officially in Jan-2025.”

“PBoC may continue to restraint the RMB from excessive weakening via daily fix, but likely they may have to also use offshore funding squeeze (not used yet) to ensure more effective transmission. Elsewhere, there may be other stimulus support measures to support the domestic economy, but these are at best mitigating factors only.”