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Hovering Just Off Monday's Late Cheaps


Climbs Above The 20-Day EMA


Outlook Remains Bearish


Chinese Media Looks To Placate Equity Worry


(U1) Holding Onto Gains

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The greenback continued its move higher on Thursday pushing USD/CNH to highs of 6.4653 before pulling back slightly. The move higher stalled just below the 100-DMA, 6.4694, and denoted the highest since May 6. The pair is sandwiched between its 100-DMA and 50-DMA (6.4442), last trades at 6.4518.

  • Markets will watch the PBOC's fixing today, yesterday saw the biggest one day increase for USD/CNY since March 2020 while the pair closed at a one month high, however the weakness in the euro has skewed the CFETS basket, which could mean further upside for USD/CNY and the PBOC is unlikely to resist.
  • Elsewhere, there were reports in the China Securities Times that volatility in the yuan could increase in the second half of the year, echoing comments last week from the head of the currency regulator.
  • As a reminder, late yesterday China's Commerce Ministry Spokesman Gao Feng said China faces uncertainties in foreign investment this year, adding that China is looking to improve trade policy tools to support trade companies.