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USD/CNH Back To 7.1500, Xi & Biden To Meet Next Monday

CNH

USD/CNH is back to the 7.1500 level. This is a -1.7% fall over the past 24 hours, slightly trailing broader USD losses seen against the majors. Still, it is back to lows from early October and the 50-day EMA is not too far at 7.1384. On the topside, there could resistance at the November 4 low, near 7.1720, while beyond that is the 7.2000 figure level.

  • Outside of the US CPI focus overnight, for China currency sentiment we had the new Politburo committee calling for a more targeted approach around covid zero. The emphasis is on bringing case numbers under control as quickly as possible so normal life and production can resume (see this link).
  • Whilst this doesn't appear to be a major shift in CZS, there is hope the Guangzhou area can avoid a repeat of the Shanghai lockdown from earlier in the year, with a slight downtick reported in case numbers yesterday, while 3 out of 11 possible districts have only been locked down so far.
  • US President Biden and China President Xi will meet next Monday in Bali ahead of the G20 meetings. Taiwan and Russia are likely to be topics of discussion, while tech could also feature.
  • China avoided being labelled a currency manipulator, but the US Treasury is calling for greater transparency around FX intervention.
  • Finally, aggregate credit figures came in well below expectations for October (907.9bn yuan, against a 1600bn yuan forecast).

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