USD/CNH Breaches 7.3100 Amid Broad USD Gains

USD/CNH got above 7.3100 (highs in the 7.3115/20 region) before finding selling interest post the Asia close on Tuesday. Subsequent dips back to ~7.3000 were supported, while the pair currently tracks close to 7.3030. For Tuesday's session CNH lost 0.41%, against a ~0.70% gain in the BBDXY. USD/CNY finished up at 7.3033, after highs of around 7.3075. The CNY NEER (J.P. Morgan Index) was flat, sitting at 122.38.

• Using yesterday's USD/CNY fix (7.1783), the upside cap on USD/CNY yesterday was 7.3219, so we weren't too far away from this point.
• This is likely to leave focus on today's fix, which have been drifting lower in recent weeks, but the higher 4:30pm close yesterday (7.3088), coupled with USD strength is likely to leave fixing estimates reasonably elevated.
• The rebound in USD/CNH has lifted the 1 month risk reversal from recent lows, but at -0.03, remains well below recent highs (we got to +0.55 in mid-August). The 1 month implied vol remains fairly close to recent lows, last at 5.41%.
• The local data is empty today, with August trade figures on tap tomorrow.
• In the equity space, the Golden Dragon index lost 2.08% in US trade. This came after local equities finished lower yesterday (the CSI 300 down 0.74%).