Free Trial

7.00 Back In Focus

CNH

USD/CNH got close to 6.9850 late in NY trading, with the pair slightly lower in early trading today, back to 6.9830. The focus will be on a potential 7.00 breach. Today's CNY fixing could lean against depreciation pressures, although USD/CNH remains in sync with the broader USD trend, so a test of this level may be difficult to avoid if the USD continues to strength (DXY through 110.00 etc).

  • At this stage option markets remain relatively calm though, the 1 month implied just a touch above 6%. The 1 month risk reversal is at the top end of recent ranges, but at 0.80 is well below previous highs.
  • These markets aren’t expecting fireworks post a 7.00 break at this stage.
  • The other focus point will be geopolitics. It was confirmed overnight that China President XI will meet with Russian President Putin this Thursday, as part of Xi's first overseas trip since the onset of the pandemic.
  • The other focus point is a report from Reuters that the US is mulling potential sanctions to curb the threat of a Taiwan invasion (see this link for more details).

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.