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Tracking Near 7.2800, Outperforms Dollar Rebound, IMF Upgrades China Forecasts

CNH

USD/CNH pulled back in Tuesday NY trade. From highs around 7.2950, we got back to 7.2760. We sit slightly higher in early dealing today, last near 7.2800. This left CNH close to unchanged for Tuesday's session, although outperforming the broader rebound in USD sentiment. Spot USD/CNY finished up at 7.2800 as well, while the CNY NEER (J.P. Morgan Index) rose a further 0.18% to 122.96.

  • USD/CNH remains wedged between its 50 day (7.2985) and the 100-day EMAs (near 7.2500). The local data calendar is quiet today. We have October CPI out tomorrow.
  • There is some optimism around the outlook for China related equities, as Wall St investors gathered in Hong Kong for the Global Financial Leaders' Investment Summit (see this BBG link).
  • One positive is the potential thawing in US-China tensions, with President Xi set to meet US business leaders in San Francisco next week ahead of a planned summit with US President Biden (see this BBG link).
  • In Tuesday US trade the Golden Dragon still fell 0.72%. To recap, the CSI 300 fell -0.35% in onshore Tuesday trade, but outperformed other major indices in the region.
  • The IMF also upgraded its China growth outlook for this year and next, with 2023 growth expected to be 5.4%.

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