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USD/CNH Back Above 50-Day MA

CNH

USD/CNH's rally extended post the Asia close on Friday, getting to the 6.8850 level. We settled back around the 6.8700 level by the close and this is where we continue to track in the first part of trading for today. The CNH lost 0.55% for Friday's session, while the CNY NEER also lost ground down 0.17% (J.P. Morgan index) to 125.50/55.

  • The rebound in USD/CNH coincided with a recovery in USD indices, albeit with the China currency underperforming at the margins. USD/CNH is back above the 50-day MA (6.8482), while recent lows (from last Thursday) come in close to 6.8100.
  • Northbound flows were negative on Friday, only modestly (-0.23bn yuan), but still the first day of outflows in 10 sessions. The China Dragon index fell 0.91% on Friday's session.
  • China equities outperformance against the rest of the world eased a touch on Friday, but remains near recent highs.
  • On the data front today we have Feb industrial profits on tap. Further improvement is likely in the series (the prior was -4.0%), but it doesn't tend to be a market mover. Upcoming PMI prints this Friday for China are likely to be a greater focus point.

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