USD/CNH: Better bid but upside capped near Thursday’s high

• SIno-US tensions put a bid under USD/CNH, lifting the pair to 7.00. 
• PBOC announced a weaker daily yuan fix early Friday. 

USD/CNH is flashing green on Friday, however, the bulls are struggling to force a convincing breakout above Thursday’s high of 7.0025. 

US-China tensions weigh over yuan

The Sino-US tensions and the People’s Bank of China’s decision to announce a weaker daily fix seem to be weighing over the offshore yuan (CNH). 

As per the latest reports, the US is looking at banning TikTok, a video app developed by the Chinese technology company ByteDance. This news comes a day after the Washington Federal Communications Commission took action against Chinese technology giants. A ban on TikTok could intensify tensions between the two countries, drawing stronger haven bids for the US dollar. 

Meanwhile, the People’s Bank of China set the yuan reference rate at 7.0043 early Friday compared to Thursday’s fix at 6.9913. The weaker fix has likely added to the bearish pressure around the yuan.

Looking forward, the pair remains at the mercy of the newsflow related to the US-China tussle.  

Technical levels