USD/CNH Above 7.2200, Wider Basis With Onshore Spot

USD/CNH got to fresh highs back to mid Feb in Thursday US trade. We got near 7.2240 and track slightly lower in early Friday trade (7.2220). This was a CNH loss of 0.14%, still outperforming broader USD gains (BBDXY +0.44%). USD/CNY onshore spot finished up just under 7.2000, while the CNY NEER (J.P. Morgan Index) slipped 0.12% to 124.7.

• Mid Feb highs in USD/CNH printed close to 7.2340. The USD/CNH-USD/CNY spread is back to mid Feb levels, although sub highs beyond +300pips. Focus will remain on whether onshore spot can break above 7.2000.
• The fixing bias remains skewed against higher USD levels, although yesterday's +2% upper bound level from the fixing was 7.2360.
• Comments from the PBoC Deputy Governor yesterday around space for lower RRR levels is likely to leave the impression of a continuing easing bias from the authorities, which is a yuan headwind all else equal.
• The local data calendar is likely empty today, with Feb FDI potentially out over the next few sessions. Next week the data calendar is light with industrial profits and the Q4 final current account balance on tap.
• Next week, China President Xi Jinping also plans to meet with US business officials in efforts to aid offshore inflows into the local economy, per the WSJ. (see this link for more details).