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Free AccessUSD/CNH Back Above 7.2900, Northbound Stock Connect Outflows Continue
USD/CNH is bucking the softer USD trend elsewhere (BBDXY down 0.10%), with the pair back above 7.2900 this afternoon. Highs for the session sit just under 7.2975. Earlier lows were at 7.2691. Local equities unable to generate positive upside traction into the break has been a factor, after showing positive signs in early trade.
- The CNH's Hibor rate also shot higher, as the authorities sold CNH bills in Hong Kong to drain liquidity (35bn yuan total). This puts the 1 month Hibor largely in line with the 1 month CNH implied yield (near 5%).
- The market may be taking a buy on dips mentality for USD/CNH given broader US-China policy and growth differentials currently in play.
- Northbound outflows via the stock connect continue, with a further -4.3bn yuan so far today. Since late July we have seen -65bn yuan in cumulative outflows.
- USD/CNH remains comfortably away from Monday session highs around 7.3360.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.