Holding Near 7.0900, CNY Basket Up Strongly On Friday, Caixin Manufacturing PMI Out Today

USD/CNH tracks near 7.0900 in early Monday dealings. Late Friday Asia Pac lows in the pair printed close to 7.07 (fresh lows going back to June 2023). Lows from this period at 7.0670 weren't tested. The pair couldn't extended much beyond the 7.0900 level as Friday's US session unfolded. Onshore USD/CNY spot finished up at 7.0913 on Friday.

• CNH was close to unchanged for Friday's session. Through US trade, resilient US data outcomes, which helped push US yields higher, helped keep USD/CNH dips supported.
• Still, the CNY CFETS tracked was 97.95 end Friday, up 0.34% for the session. The CNH/JPY cross is back above 20.60, the pair gaining 1.63% last week.
• Focus is likely to remain on exporter related flows now that we are past month end. Estimates on potential conversion back into yuan are quite wide, from hundreds of billions to over 1trln.
• Bloomberg notes state banks were reportedly USD dip buyers during Friday's session, suggesting some push back to recent USD gains. The other focus point will be on the USD/CNY fixing.
• Today on the data front we have the Caixin manufacturing PMI out. The market expects a 50.0 print, against a prior 49.8.
• Over the weekend, the official PMIs for August showed manufacturing fall to 49.1 (versus 49.5 forecast). Services was at 50.3 versus 50.1 forecast. The data suggest a need for on-going policy support, with the detail showing a slump in the price components.