CNH: Rangebound vs USD, UOB

USD/CNH is at 6.74651, maintaining a rangebound pattern. UOB analysts Quek and Lee note the pair has been trading quietly, with intraday fluctuations concentrated around current levels and no clear directional breakout yet.

**Short-term: Consolidation persists**

Analysts say USD/CNH has entered a consolidation phase after recent declines, with the price hovering around 6.74651. The pair previously maintained a downward bias below 6.7820, targeting 6.7600, and closed nearly flat at 6.7734 last Thursday. Given the recent trading rhythm, the pair lacks sustained one-way momentum, with market sentiment largely wait-and-see.

**Medium-term: Gradual CNY appreciation expected**

Market reports indicate some institutions hold a moderately optimistic view on CNY's medium-term trajectory. J.P. Morgan Asset Management's recent report suggests CNY has a tendency for gradual appreciation; if US-China meetings yield substantive results, USD/CNH could test 6.50. In a baseline scenario, the pair is anchored around 6.75. However, this outlook assumes smooth progress in negotiations, and market participants should continue monitoring the actual outcomes of subsequent talks.

**Offshore liquidity: High-yield deposits reflect volatility expectations**

Reports show some Hong Kong banks have recently launched high-yield short-term CNY deposit products to attract funds, with 7-day deposits offering annualized rates up to 21% and 14-day deposits up to 10%. Market participants believe banks locking in deposits at elevated rates ahead of time often reflects expectations of greater exchange rate volatility. That said, on the current trading surface, USD/CNH remains rangebound with no trend-like movement emerging.