Tighter Funding Doesn't Aid CNH, USD/CNY Closes Near 7.2300

USD/CNH largely tracked sideways post the Asia close on Wednesday. We couldn't sustain a push above the 7.2600 level and track near 7.2560 in early Thursday dealings. Onshore USD/CNY spot finished up at 7.2260, slightly off Wednesday session highs. We couldn't breach the 7.2300 handle yesterday. The CNY NEER (J.P. Morgan index) was flat for Wednesday's session, close to 124.63.

• Tighter funding costs didn't give CNH much of a lift through Wednesday trade. CNH T/N points got above +20, fresh highs back to 2022, but we sit lower now. This is likely to be a focus point given yuan depreciation pressures and also month/quarter end.
• Note the MNI China Liquidity index remained loose in March, see this link for more details.
• The data calendar is quiet until tomorrow's Q4 final BoP current account release, but Sunday's official PMI prints for March will be in greater focus. The market forecast is for the manufacturing PMI to rise back to 50.1 from 49.1 prior.
• The CNY fixing and onshore spot open will be today's focus points, particularly if we can push beyond the 7.2300 level. For USD/CNH, recent lows rest at 7.2325, while highs are just above 7.2800.
• Yesterday, China President Xi met with key US business executives (see this link). Xi also criticized technological barriers during a visit by the Dutch PM, per BBG.