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Greenback Bounces

BOND SUMMARY

JGB, ACGB Supply Eyed

MYR

Malaysians Urged To Stay At Home

CHINA YUAN

Spot USD/CNH has been boosted by U.S. President Trump's action against TikTok and WeChat. The POTUS signed off on a couple of executive orders preventing U.S. residents from doing business with the apps and their owners. The orders, which will take effect in 45 days, inspired demand for USD/CNH and the resultant move has nearly wiped out Wednesday's dynamic sell-off, which allowed the rate to show at multi-month lows.

  • That being said, further gains may have been capped by a healthy and above-forecast July trade surplus reported by China. The beat vs. forecasts was driven by a solid rebound in exports, even as analysts expected shipments to edge lower.
  • USD/CNH last trades +294 pips at CNH6.9732. After the formation of a (virtual) Doji candlestick and a failure to punch through Wednesday's multi-month low yesterday, bulls hope for a stronger rebound, eyeing the CNH7.0000 mark for initial resistance. Above there would open Jul 30 high of CNH7.0171. Bears need a drop through Wednesday's low of CNH6.9321 before targeting Mar 9 low of CNH6.9049.
  • China will release preliminary Q2 current account balance and monthly update on foreign reserves later today.
  • Main points of note on next week's Chinese calendar include inflation data (Monday) and monthly economic activity indicators (Friday).
MNI London Bureau | +44 203-865-3806 | krzysztof.kruk@marketnews.com