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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.
CNH
CNH rose by a record amount against the USD over the past 24 hours. The 1.72% gain saw USD/CNH get to the low 7.1800 region. We sit slightly higher currently, around 7.1900. From a technical standpoint, the pair is right on the 20-day EMA (7.1901), see the chart below. We haven't been below this level since early October, while dips below this support level have been supported since mid August.
- There were further reports of state banks selling USDs per Bloomberg overnight, see this link for more details. Recall in late September, there were reports the authorities were telling state banks to be prepared to intervene in the offshore CNH market. Whether this impact’s official FX reserves remains to be seen, although October’s update is likely to be a focus point for the market.
- Onshore spot ended yesterday's session at 7.1730, a 1.32% fall. The 4:30pm level was 7.1825. The CNY NEER rebounded +0.53%, according to J.P. Morgan estimates.
- Today's data calendar has industrial profits data for September, the last print was -2.1% YTD y/y.
- The Standard Chartered China SME confidence index slipped back under 50 to 49.93. We remain above May lows of 48.50 though.
Fig 1: USD/CNH Back To 20-day EMA
Source: MNI - Market News/Bloomberg
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.
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