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CNH: USD/CNH Firms Back Towards 7.1400, But Outperforms Broader USD Rise

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USD/CNH tracks near 7.1360 in early Tuesday dealings. CNH lost 0.26% for Monday's session, modestly outperforming the +0.45% gains seen for the USD indices (BBDXY and DXY). Spot USD/CNY ended Monday's session just under 7.1210. The CNY CFETS index tracker rose a further 0.14% to 99.33.

  • For USD/CNH technicals, yesterday's dip under the 50-day EMA (near 7.1115) wasn't sustained, while on the topside the 100-day EMA (near 7.1485) remains intact.
  • The yuan will remain sensitive to core yield developments, given the PBoC is still in easing mode, although its beta with respect to such moves is likely to remain lower than yen (which fell nearly 0.90% in Monday's session).
  • The USD/CNY fixing bias remains close to neutral, while proximity to the US election is also likely to see the authorities keen to avoid sharp swings in yuan sentiment.
  • In the equity space, the CSI 300 finished marginally higher in Monday trade, but is sub 4000 in index terms. the real estate sub index rose over 1% after the slightly larger LPR cuts. In US trade, the Golden Dragon index lost 0.80%.
  • The local data calendar has FX settlement figures on tap today for Sep. We are also due the 1yr MLF outcome before the end of the week. 

 

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USD/CNH tracks near 7.1360 in early Tuesday dealings. CNH lost 0.26% for Monday's session, modestly outperforming the +0.45% gains seen for the USD indices (BBDXY and DXY). Spot USD/CNY ended Monday's session just under 7.1210. The CNY CFETS index tracker rose a further 0.14% to 99.33.

  • For USD/CNH technicals, yesterday's dip under the 50-day EMA (near 7.1115) wasn't sustained, while on the topside the 100-day EMA (near 7.1485) remains intact.
  • The yuan will remain sensitive to core yield developments, given the PBoC is still in easing mode, although its beta with respect to such moves is likely to remain lower than yen (which fell nearly 0.90% in Monday's session).
  • The USD/CNY fixing bias remains close to neutral, while proximity to the US election is also likely to see the authorities keen to avoid sharp swings in yuan sentiment.
  • In the equity space, the CSI 300 finished marginally higher in Monday trade, but is sub 4000 in index terms. the real estate sub index rose over 1% after the slightly larger LPR cuts. In US trade, the Golden Dragon index lost 0.80%.
  • The local data calendar has FX settlement figures on tap today for Sep. We are also due the 1yr MLF outcome before the end of the week.