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CNY: Spot USD/CNY Near 200-day MA Resistance, State Banks Selling USDs

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Spot USD/CNY opened higher, pushing above 7.1860, before pulling back modestly. BBG headlines crossed a short while ago of state banks selling USDs to support the onshore yuan. There were reported similar flows yesterday as USD/CNY rose amid broad USD gains following Trump's election victory. Still USD/CNY dips have been supported and we track at fresh highs in latest dealings (near 7.1870). 

  • For spot USD/CNY, the simple 200-day MA is near 7.1900, while we haven't been above 7.2000 since early August. Earlier YTD highs printed at 7.2775.
  • USD/CNH is off earlier highs (7.2132) which came after the fairly neutral fixing outcome. The market may have expected greater push back but state bank selling USDs suggests still some concern around the pace of yuan depreciation.
  • The USD/CNH-USD/CNY basis is back to +200pips and is likely to remain positive so long as the market sees yuan depreciation risks. 
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Spot USD/CNY opened higher, pushing above 7.1860, before pulling back modestly. BBG headlines crossed a short while ago of state banks selling USDs to support the onshore yuan. There were reported similar flows yesterday as USD/CNY rose amid broad USD gains following Trump's election victory. Still USD/CNY dips have been supported and we track at fresh highs in latest dealings (near 7.1870). 

  • For spot USD/CNY, the simple 200-day MA is near 7.1900, while we haven't been above 7.2000 since early August. Earlier YTD highs printed at 7.2775.
  • USD/CNH is off earlier highs (7.2132) which came after the fairly neutral fixing outcome. The market may have expected greater push back but state bank selling USDs suggests still some concern around the pace of yuan depreciation.
  • The USD/CNH-USD/CNY basis is back to +200pips and is likely to remain positive so long as the market sees yuan depreciation risks.