CNH Underperforms USD Weakness, NEER Down A further 1%
USD/CNH is comfortably below highs from late yesterday. Resistance was seen just above 7.2750, while the pullback sub 7.2200 saw buying interest emerge. The pair was last around 7.2400. This leaves CNH slightly weaker over the past 24 hours, despite further USD weakness. The CNY NEER is down a further 0.93% (J.P. Morgan Index), losing just over 2% since the start of the week.
- The main focus today will domestic inflation prints, with CPI and PPI expected to moderate further (with the latter expected to slip back into deflation). See this link for more details.
- Elsewhere, the China Dragon Index lost 0.53% overnight, following Monday's 2.18% dip. Onshore equities were modestly lower yesterday, but bucked the broadly positive trend elsewhere in the region.
- For today's fix, yesterday's 4:30pm onshore level was 7.2620, but a weaker USD more broadly will provide an offset.
- The other focus point will be the daily covid case numbers after yesterday's 6 month high.