Send to China Transfers Compared

Bias Bearish-to-range-bound, as USD/CNY sits below its 90-day average and in the lower half of the 3-month range. Key drivers - Rate gap: The Fed is expected to ease toward a neutral stance in 2026, with rate cuts anticipated by markets, while the PBOC keeps policy stable to support the yuan. - Macro factor: PBOC offshore yuan bills in Hong Kong continue to absorb liquidity and cap yuan downside pressure. - Trade and geopolitics: Geopolitical tensions and tariff developments may affect risk flows, nudging USD/CNY toward the range's extremes if headlines shift. Range The pair is likely to drift within the 3-month range, with a tendency to hold near the lower end unless data surprises or headlines shift to clearer policy signals. What could change it - Upside risk: stronger US payrolls and a less dovish Fed stance could lift USD toward the upper end, especially if inflation cools only gradually. - Downside risk: softer US data or clearer easing by the Fed, plus ongoing PBOC support and stabilizing domestic growth, could push USD/CNY lower