Steady As She Goes

USD/CNH little changed at CNH6.3910 at typing, with the rate's recent run of striking stability remaining in play, leading to some discussion re: the "invisible hand" of the Chinese powers that be being in play.

• The recent speculation surrounding the loosening of restrictions surrounding the property sector may be acting as an incremental positive for the redback, despite the noted headwinds for that sector. Structurally, the BoP dynamic, capital flow surrounding CGBs and global bond index inclusion, as well as the still notable level of carry vs. the USD continue to support the yuan in the background.
• Short term lines in the sand are well defined. Further gains past the Oct 29 high (CNH6.4104) would shift bullish focus to the 50-DMA (CNH6.4304). Bears need a fall through the Oct 25 low (CNH6.3748), which would expose the Oct 19 low (CNH6.3687). Below there, integral support is seen at the May 31 low (CNH 6.3525)
• The press conference at the end of the CCP's plenum will garner interest today, while Monday is expected to herald a long-awaited phone call between Chinese President Xi & his U.S. counterpart Biden. Note that Sino-U.S. relations present a clear risk to CNY outperformance, with Chinese policymakers able to weaponise the currency if tensions elevate.