Keep a close eye on the USD/CNH in 2025 because it could impact USD/JPY

As the offshore Chinese currency (USDCNH) pushes higher this morning, rising above 7.33, the reader is pointed to its most recent yearly highs south of 7.40. Those annual highs peaked peaked around 7.3750 and then at 7.3680 in 2022 and 2023. So, as you can see, the dollar is edging towards those right now, as 2024 draws to a close. The prospect of the USD/CNH taking out 7.40 is surely live in the weeks ahead and of course the threat of trade sanctions on China by Trump next year is very much front and centre of why the Chinese currency is weakening right now. The other very important thing to note about potential Yuan weakness from here on; is the impact that might have on the Yen next year too. It is important not to dismiss that. There will be much more to add on that as the New Year unfolds. Meantime, the USD/CNH has just reached its highest level of the year this morning, 7.3390. It is currently trading at 7.3370