March 21, 2023 22:22 GMT
USD/CNH Can't Sustain Sub 6.8700 Levels, Xi/Putin Pledge Stronger Economic Ties
USD/CNH tracked lower post the Asia close, getting just under 6.8650 before rebounding. We got back to 6.8850 late in NY trade before drifting down to 6.8750 by the close. This keeps the pair within recent ranges, and little changed for Tuesday's session. Note the 200-day EMA is nearby at 6.8715, while early Monday session lows, just under 6.8600 remain intact. The CNY NEER was steady for Tuesday's session, around 125.75 currently (J.P. Morgan index).
- The local data calendar remains empty, with on-going focus on President Xi's trip to Russia. Talks with officials, including Putin, continued, with both sides pledging to boost trade ties between the two countries, although it didn't appear that any fresh deals were announced.
- Bilateral trade between the two countries is expected to reach $200bn this year, with the aim of significantly boosting this by 2030, with more trade to be settled in local currencies as well.
- The other focus point is expected to be Xi's conversation with Ukraine President Zelenskiy, although moves to end the Ukraine war are not expected to gain much traction, given the respective starting points of Ukraine and Russia.
- The China Dragon index gained 2.35% on Tuesday, amid broad based equity market gains. The US administration will reportedly curtail tech firms investment in China if they receive Federal funds to build operations in the US (see this link for more details).