FXStreet (Mumbai) – The offshore Yuan or CNH dropped against the USD on speculation the People’s Bank of China (PBOC) will cut reserve ratio by March.
The USD/CNH rose to a high of 6.6023 levels. The CNY came under pressure after the China Securities Journal carried a front page commentary that the PBOC should cut he amount of cash lenders need to set aside as reserves to adjust to changes in financial institutions’ yuan positions and market liquidity.
Meanwhile, the onshore currency or CNY remained steady around 6.5792. The speculation about the cut in the reserve ratio was triggered by the data released in China on Tuesday that showed the full year 2015 GDP was lowest in 25 years.
USD/CNY Technical Levels
The immediate resistance is seen at 6.6070 (10-DMA), above which the pair could rise to 6.6252 (Jan 14 high). On the other hand, a break below the immediate support at 6.5895 (5-DMA) could see the pair drop to 6.5722 (Jan 18 low).
(Market News Provided by FXstreet)