The USDCNY forward points have taken a dramatic turn, plummeting to a record low of 2485 points yesterday, marking a staggering decline of approximately 200 pips in just a week. This sharp drop is largely attributed to the widening interest rate gap between the US and China. According to the forward curve, the Chinese yuan is expected to undergo a 1.4% to 0.25% (%) interest rate cut, implying an approximately 115 basis point decline over the next 9 months. This development is likely to further pressure the forward points, leading to a potential decline in the value of the Chinese yuan.
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