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CNH: USD/CNH Firms Relative To USD/CNY, CNH Mixed On Key Crosses

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USD/CNH found support near 7.2400 and rallied towards 7.2600 as US Thursday trade unfolded. We track near 7.2550 in early Friday dealings, with CNH down modestly for Thursday's session. The surge in US trade for the pair appeared to coincide with EUR/USD falling back through 1.0500. Spot USD/CNY was much more benign, the pair finished slightly lower for Thursday's session at 7.2422. The CNY CFETS basket tracker (per BBG) rose 0.24% to 99.87. 

  • A positive basis has re-emerged for USD/CNH-USD/CNY. Implied yields on CNH short term tenors are off recent highs, the 1 week near 3.73%, after getting above 5% in the first part of the week. This may be weighing on CNH at the margins relative to CNY.
  • For USD/CNH recent highs of 7.2665 remain intact, while key support is likely around the 7.2000 region (both 20-day EMA and simple 200-day MA). Before that, Nov 19 lows come in near 7.2250.
  • CNH was mixed on crosses, with EUR/CNH falling to fresh lows sub 7.6000, levels last seen in mid 2023. There were multiple EUR headwinds through Thursday trade. CNH/JPY moved lower, as yen outperformed in the G10 space, but the pair maintains recent ranges (last near 21.293).
  • The local data calendar is empty today with the 1yr MLF decision still due. Note next week we have the Oct industrial profits print out on Wednesday. 
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USD/CNH found support near 7.2400 and rallied towards 7.2600 as US Thursday trade unfolded. We track near 7.2550 in early Friday dealings, with CNH down modestly for Thursday's session. The surge in US trade for the pair appeared to coincide with EUR/USD falling back through 1.0500. Spot USD/CNY was much more benign, the pair finished slightly lower for Thursday's session at 7.2422. The CNY CFETS basket tracker (per BBG) rose 0.24% to 99.87. 

  • A positive basis has re-emerged for USD/CNH-USD/CNY. Implied yields on CNH short term tenors are off recent highs, the 1 week near 3.73%, after getting above 5% in the first part of the week. This may be weighing on CNH at the margins relative to CNY.
  • For USD/CNH recent highs of 7.2665 remain intact, while key support is likely around the 7.2000 region (both 20-day EMA and simple 200-day MA). Before that, Nov 19 lows come in near 7.2250.
  • CNH was mixed on crosses, with EUR/CNH falling to fresh lows sub 7.6000, levels last seen in mid 2023. There were multiple EUR headwinds through Thursday trade. CNH/JPY moved lower, as yen outperformed in the G10 space, but the pair maintains recent ranges (last near 21.293).
  • The local data calendar is empty today with the 1yr MLF decision still due. Note next week we have the Oct industrial profits print out on Wednesday.