USD/CNH Back To 6.9600 Handle, Golden Dragon Index Rallies On US/China Meeting

USD/CNH remained on the front foot post the Asia close. By late NY the pair was just above 6.9640, but we settled back under 6.9600 by the close. We are very close to the simple 200-day MA (just above 6.9600), which is a level we couldn't hold above in early May. CNH lost 0.30% for Thursday's session, while the CNY NEER edged up 0.17% to 124.25, as CNH modestly outperformed the stronger USD tone.

• Late yesterday we got Apr credit figures which were noticeably weaker than expected, with aggregate finance at 1220bn yuan versus 2000bn yuan expected. New loans were 718.8bn yuan, against a 1400bn yuan forecast. This data will also raise concerns over the strength of economic recovery and comes after yesterday's inflation misses.
• Local equities finished down modestly yesterday, but in Thursday trade in the US the Golden Dragon index surged by 3.82%.
• Sentiment appeared to be buoyed by reports of talks between US National Security Adviser Sullivan and China's top diplomat Wang Yi, which were held in Vienna Wed-Thur. This comes after earlier reports in the week of the US trying to organize a call between US President Biden and President Xi Jinping.
• The local data calendar has Q1 BoP/current account details out today.