USD/CNH remains under pressure even as China’s activity data disappoints, with a fresh multi-month low in the daily fixing reinforcing a gradual RMB appreciation bias. While technicals stay mildly bearish, near-term direction will hinge on whether policymakers slow the pace of lower fixes or allow further downside in spot. Pair was last at 7.0371 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

PBoC fix hits new multi-month low

"USD/CNH continued to trade with a heavy bias despite activity data coming in softer – retail sales, industrial production and new home prices underwhelmed. Mild bearish momentum on daily chart remains intact while RSI is near oversold conditions. Next support is closer to 7 levels. Resistance at 7.05, 7.0780 (21 DMA)."

"Today’s fix was set to a fresh multi-month low of 7.0602 vs. yesterday’s fix at 7.0656. The broader fixing pattern remains consistent since Apr-2025 and we view this as a deliberate move to steer the RMB on a gradual appreciation path while maintaining market order."

"But in the near term, we continue to watch if policymakers would moderate the pace of setting the fix lower (i.e. set the fix higher in attempt to slow the pace of RMB appreciation) or continue with a similar trajectory. The latter may continue to add to downside pressure while the former may see some temporary consolidation in spot."