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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
- The persistence of volatility due to Russia-related tensions combined with the firm momentum on USD have led to a sharp consolidation in USDCNY in the overnight trading session.
- Interestingly, the surge in volatility this month did not impact the CNY (until today), which was constantly reaching new highs against the greenback.
- As a reminder, CNY has generally been qualified as a ‘risk-on’ currency in the past cycle; the more aggressive the fall in VIX, the stronger the CNY gains; on the other hand, volatility spikes have been associated with ‘strong’ CNY losses.
- After reaching a local low at 6.3205 yesterday (lowest level since April 2018), USDCNY consolidated sharply higher during the overnight trading session as the ‘hawkish’ Fed continues to support the US Dollar against major crosses.
- In addition the PBoC fixing of yuan reference could have also amplified the pressure on CNY.
- The PBOC set the mid-point of permitted USD/CNY range at CNY6.3382 yesterday, 18 pips above sell-side estimate.
- USDCNY was testing its 50DMA at 6.3671 during London trading session; a break above that level would open the door for a move up to 6.3960 (100DMA).
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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