Higher Still

MNI (London) - USD/CNH has consolidated a move above CNH7.2500 aided by an uptick in the broader USD and a yuan-negative European reaction to yesterday evening’s WSJ source report which suggested that “the Biden administration is considering new restrictions on exports of artificial intelligence chips to China, as concerns rise over the power of the technology in the hands of U.S. rivals.”

• The 28 Nov ‘22 high (CNH7.2592) has been breached, with bulls turning focus to the Nov 9 ’22 high (CNH7.2799) as the rate shows as high as CNH7.2623.
• Despite the popularity of the bearish yuan trade participants remain willing to push the envelope as they await details of any impending Chinese stimulus plans (with many eying July’s Politburo for such an announcement).
• The recent policy mix, leaning heavily on the monetary side, has been yuan negative, while there was a lack of a guiding hand from policy makers (neutral mid-point fix) earlier today, which facilitated an initial bid in the cross.