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USD/CNH Back To 7.1500, Golden Dragon Index Falls 3.5%

CNH

CNH couldn't escape broader USD gains. USD/CNH got to highs near 7.1550 post the Asia close, while subsequent dips back below 7.1500 were supported. The pair tracks near 7.1500 in early Wednesday trade, having lost 0.35% for Tuesday's session. USD/CNY finished up at 7.1432. Broader USD gains were firmer than the yuan losses, the BBDXY up 0.71% as US yields continued to recover.

  • On the topside for USD/CNH we have the 200-day EMA not too far away at 7.1580/85. The 20-day is very close to current spot levels. We would expect firmer resistance on any move back towards 7.2000. Recent lows rest under 7.0900.
  • The local data calendar is quiet today, with Caixin PMIs for the services side and composite index out tomorrow.
  • The equity backdrop got off to a poor start yesterday, with the CSI 300 finishing down 1.3%. Familiar worries dominated, while improved travel trends over the new year period (back to 2019 levels) didn't aid aggregate stock indices.
  • The Golden Dragon index slumped in US trade for Tuesday, falling 3.5%, giving up a chunk of late 2023 gains.

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