Back To 7.1800 Handle, Easier Liquidity/ Lower EUR Weigh

USD/CNH was mostly on the front foot post the Asia close on Thursday. We got close to 7.1900 in the US session, before pulling back close to 7.1800 by the close. We track near these levels in early Friday trade, having lost 0.25% for Thursday's session, CNH's first loss in a little over a week. USD/CNY finished up at 7.1739, while the CNY NEER (J.P. Morgan Index) rose 0.10% to 124.38.

• For USD/CNH we are wedged between key EMAs, the 20-day close by to current spot levels. The 100-day sits close to 7.1990, the 200-day at 7.1635 on the downside.
• EUR weakness post the ECB likely aided the USD/CNH bid, as broader USD indices finished higher.
• A looser liquidity backdrop also worked against CNH. TN points are comfortably off recent highs and back in negative territory. The 1 month forward implied CNH yield sits back at +2.7%, against recent highs of +3.7%.
• A broadly positive equity backdrop didn't aid CNH sentiment much. The CSI 300 finished 2.0% better off, with the Hang Seng adding a similar amount. The latter has retaken the 16,000 mark, recovering from Monday’s showing below 15,000. The Golden Dragon index slipped 0.13% in US trade.
• The local data calendar is empty today, note Dec industrial profits data prints tomorrow.