7.00 Acting As A Resistance Point

(MNI Australia) USD/CNH followed the broader USD trajectory higher. CNH lost 0.70% through Thursday's session, slightly outperforming gains seen in some of the USD indices (BBDXY +1%). The NEER rose 0.28%, (J.P. Morgan Index) for the first gain this week. USD/CNH couldn't breach 7.00 in NY trading and settled back into the close in the low 6.9900 region, which is where we currently track.

• Since breaking back sub 7.00 on Dec 5, we have tried a number of times to move back above this level in recent weeks.
• The data calendar is relatively quiet until next Tuesday when the 1yr and 5yr LPR's are due. No change is expected at this stage (1yr at 3.65%, 5yr at 4.30%).
• There is little optimism of a near term turn around in economic data momentum, following yesterday's poor November activity prints. The focus is likely to be on potential fresh policy stimulus as we progress into 2023.
• Bloomberg also noted China's death toll could reach 1 million as covid curbs are rapidly wound back, according to research conducted by HK health experts.
• The China Dragon index fell by 2.23% overnight, as broader equity sentiment faltered. Delisting risks appear to have been averted for now, as US audit teams were able to get access to China firms according to the US Public Company Accounting Oversight Board. Such an outcome has likely been the market base case though in recent weeks.