USD/CNH Back To Familiar Ranges, US Set To Limit Investment In Parts Of China's Economy

USD/CNH got sub 6.8750 in NY trade, before closing back around 6.8830. This was a modest 0.16% gain in CNH terms for Thursday's session, but we sit comfortably below Wednesday session highs around the 6.9100 level. Still, more broadly, USD/CNH remains comfortably within ranges seen through April. The CNY NEER (J.P. Morgan Index) edged up 0.1% to 125.40.

• FX settlement data for March should cross today, but is unlikely to impact CNH sentiment. Greater focus is likely to rest on Thursday developments in the US. President Biden is expected to sign an order in the next few weeks which limits US investment into parts of the China economy, with a particular emphasis on the technology sector.
• US Treasurer Secretary Yellen also spoke and stated the US was prepared to bear economic costs in terms of US-China relations, as the US defends its economic interests. She still left the door open for better communication and greater economic cooperation.
• The China Golden Dragon index slipped 1.53% in US trade, although broader equity sentiment was softer. The index is back below its simple 200-day MA.
• Comments from the PBoC also crossed, with the central bank stating that interest rates will be kept at appropriate levels, with a renewed focus on interest rate risk in light of the SVB collapse in the US.