April 11, 2022 02:03 GMT
Offshore yuan has been unfazed by the fact that China's March inflation numbers beat expectations, as CPI growth accelerated to +1.5% Y/Y (vs. BBG est. of +1.4%), while the increase in factory-gate prices slowed to +8.3% Y/Y (vs. BBG est. of +8.1%).
- China continues to battle its outbreak of Covid-19 with Guangzhou announcing a slew of restrictions amid worry that the cluster of Omicron infections detected last week may have already spread through densely populated areas. The main focus remains on Shanghai, where daily cases continue to climb despite harsh countermeasures which are resulting in food and medicine supply disruptions. On a positive note, the steel hub of Tangshan is lifting its lockdown after reporting no new infections for nine consecutive days.
- Spot USD/CNH has added 68 pips and last changes hands CNH6.3767. Should the rate take out Apr 6 high of CNH6.3871, bulls could take aim at Mar 28 high of CNH6.3983, followed by the 200-DMA at CNH6.4043. Conversely, bears look for a dip through last week's lows around ~CNH3580 before targeting Mar 31 low of CNH6.3452.