USD/CNH Finds Selling Interest Around 50-Day EMA, April Trade Figures Out Today

USD/CNH got to around 7.2340 late in Wednesday trade before drifting a touch lower as we progressed through US trade. We are around 7.2290 in early Thursday dealings (after losing a modest 0.06% for Wednesday). USD/CNY finished up at 7.2246, slightly down from earlier highs. Broader USD trends were positive, with the BBDXY up for Wednesday (+0.16%), but we finished away from highs.

• Wednesday intra-session highs came in around the 50-day EMA (just under 7.2340). Also note the 100-day EMA is nearby on the downside, close to 7.2250.
• US-CH yield differentials have edged higher, but remain of late April highs. Onshore media quoted domestic analysts saying a Q2 RRR cut was possible. Policy divergences with the US are likely to persist in the near term.
• There are also concerns around property stimulus efforts, with sales data for the May labor day holiday period well down on 2023 outcomes. We saw sharp falls in the property sub-equity indices yesterday.
• Today we have the April trade figures on tap. Export growth is expected at 1.3% y/y, versus -7.5% prior. Imports are forecast at +4.7% y/y (from -1.9% prior). The trade surplus is expected to rebound to $81bn (from $58.55bn).