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USD/CNH Can't Sustain 7.2000 Dip, But CNH Still Higher For 4th Straight Session


USD/CNH's low for Tuesday came late in Asia Pac trade, coming in around the 7.1950 region. From there the pair steadily recovered to 7.2250, before edging back down to 7.2120 by the NY close. This was a 0.24% gain in CNH terms for the session. USD/CNY finished up just under 7.2100, while the CNY NEER (J.P. Morgan index) nudged a touch higher to 120.72.

  • Late yesterday, June aggregate credit figures printed, which came in stronger than expected. Aggregate finance was 4220bn yuan (3100bn yuan forecast, 1555.6bn prior), while new loans were 3050bn yuan, also above the 2318.5bn yuan forecast.
  • This pick-up follows the recent rate cuts, although corporate loan demand continues to run at a faster clip relative to housing/consumer loans. A pick up in the latter may be needed to boost the consumption outlook. Note tomorrow we get June trade figures.
  • Elsewhere, President Xi Jinping called for a greater opening up of China's economy, stating 'key areas of foreign exchange and cooperation such as investment, trade, and financial innovation should be focused on' (see this link).
  • The other focus point is likely to be any further details around fresh stimulus/policy support measures, which was a strong focus point of onshore media yesterday.

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