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Outperforms Broader USD Rebound, 1yr MLF Expected To Remain Steady

CNH

USD/CNH rebounded sharply post the Asia close on Friday. From multi-week lows around 6.8300, we got back above 6.8700 amid broad USD gains. We sit slightly lower in early trade today, back near the 6.8700 handle. Still, the China currency outperformed the broader dollar rebound for Friday as a whole, the CNY NEER rebounding 0.33% to 125.10 (J.P. Morgan). This keeps the NEER within recent ranges.

  • On the data front today, the 1yr MLF rate is expected to be held steady at 2.75% (volumes at 220bn, from 481bn previously).
  • This comes ahead of tomorrow's Q1 GDP and March activity data. Data from last week was generally better than expected, outside of inflation outcomes.
  • The Citi China data surprise index sits just below record highs, last at the +154 level.
  • PBoC Governor also gave a speech in Washington on Saturday, stating that China has largely ended currency intervention (see this link for more details). Other issues were also discussed in terms of maintaining price and financial stability.

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