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Offshore Yuan Slips, Covid Keeps Haunting China


Spot USD/CNH has added 45 pips so far amid continued Covid-19 worry & the prospect of looser policy in China. The rate deals at CNH6.3820.

  • Looking ahead, monthly Loan Prime Rate fixing is due tomorrow, with majority of economists surveyed by Bloomberg expecting reductions of 1-year & 5-year rates.
  • Note that on Monday the PBOC unveiled a list of 23 measures to support individuals and small businesses affected by the renewed outbreak of Covid-19.
  • Daily infections show no convincing signs of easing, with Shanghai's case count holding above 20k despite drastic containment measures. The steel hub of Tangshan locked down 5 districts again amid repeated flare-up of infections.
  • Bulls look for a jump above Apr 14 high of CNH6.3958 before targeting Mar 28 high/200-DMA at CNH6.3983/6.4014. Bears would be pleased by a retreat under Apr 13 low of CNH6.3707.

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