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USD/CNH Back Near 7.2400 Amid USD Pullback

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USD/CNH tracks near 7.2420 in early Monday dealings, close to session lows. We ended last week near 7.2600. CNH is around 0.25% stronger so far today, amidst broader USD softness, although it is lagging the G10 moves. The DXY is off around 0.55% so far, with a similar dip for the BBDXY index. 

  • These moves follow incoming US President Trump nominating Scott Bessent for the US Treasury position. Bessent is seen as less reflationary in terms of recent comments made - needing to lower the fiscal deficit and that tariffs should be used as a negotiating tool.
  • CNH is lagging broader USD trends though, which is typical in terms of sharp shifts in the dollar.
  • The other notable factor is the sharp underperformance of China related equities through Friday's session. The CSI 300 finished down over  3%, amid earnings concerns. In Friday US trade the Golden Dragon index fell 1.37%.
  • For spot USD/CNH, the 20-day EMA is back near 7.2040. Ahead of that we have the Nov 19 low at 7.2253. Onshore USD/CNY spot finished up Friday's session at 7.2480. The CNY CFETS basket tracker rose to 100.06 on Friday, up 0.19%.
  • We should get the the 1yr MLF decision today, with no change expected in the rate (currently 2.00%). 
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USD/CNH tracks near 7.2420 in early Monday dealings, close to session lows. We ended last week near 7.2600. CNH is around 0.25% stronger so far today, amidst broader USD softness, although it is lagging the G10 moves. The DXY is off around 0.55% so far, with a similar dip for the BBDXY index. 

  • These moves follow incoming US President Trump nominating Scott Bessent for the US Treasury position. Bessent is seen as less reflationary in terms of recent comments made - needing to lower the fiscal deficit and that tariffs should be used as a negotiating tool.
  • CNH is lagging broader USD trends though, which is typical in terms of sharp shifts in the dollar.
  • The other notable factor is the sharp underperformance of China related equities through Friday's session. The CSI 300 finished down over  3%, amid earnings concerns. In Friday US trade the Golden Dragon index fell 1.37%.
  • For spot USD/CNH, the 20-day EMA is back near 7.2040. Ahead of that we have the Nov 19 low at 7.2253. Onshore USD/CNY spot finished up Friday's session at 7.2480. The CNY CFETS basket tracker rose to 100.06 on Friday, up 0.19%.
  • We should get the the 1yr MLF decision today, with no change expected in the rate (currently 2.00%).