A Brief Analysis of USDCNY in the 3Q of 2024

In the third quarter of 2024, the USD Index initially retreated on the back of the Fed's September rate cut expectations but rebounded strongly in October, fueled by Trump’s electoral victory. The CNY followed a similar pattern, appreciating briefly in September to its yearly low of 7.0012 on September 25, before weakening significantly thereafter. This trend underscores the high anchoring of the CNY to the USD and the growing divergence in the economic fundamentals of the US and China.

On November 22, the USD/CNY exchange rate climbed to 7.2428, marking the second-highest level of the year after reaching 7.2776 earlier in the quarter. This rise reflects a significant rebound from its September low, driven by shifts in monetary policy, economic conditions, and market expectations. Additionally, the USDX surged to 108.1104, its highest level in two years, highlighting the dollar’s broad-based strength amid global uncertainty.

As for the subsequent trend of the CNY, stay tuned to my channel for continued analysis of exchange rates.