- USD/CNH is flashing green with China threatening retaliation to the US’ move on Hong Kong.
- China cut on-year and five-year loan prime rate as expected.
The offshore Yuan exchange rate (CNH) is losing altitude amid renewed US-China political tensions.
The USD/CNH is currently trading at 7.0353, representing a 0.15% gain on a 24-hour basis.
The Chinese currency has likely come under pressure due to escalating political tensions between the US and China.
The US Senate on Tuesday passed legislation aimed at protecting human rights in Hong Kong. The “Hong Kong Human Rights and Democracy Act” will now be put to test in the House of Representatives, which approved its own version of the measure in October.
The US’ move has irked China, whose Foreign Ministry was out on the wires earlier today warning of retaliation.
It is worth noting that the renewed political tensions could complicate trade issues between the two nations. President Trump on Tuesday said that China is moving along well on the trade front and needs to sign the deal he wants else the US will hike tariffs on Chinese imports.
China cuts rates
China reduced interest rates a few minutes before press time. The nation reduced the one-year loan prime rate to 4.15% from 4.20% and the five-year rate to 4.80% from 4.85%.
So far, however, the move has not had a notable impact on the CNH, possibly because the rate cut was expected.
Technical levels
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