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USD/CNH Holding Above 7.3100, Equity Weakness In Focus

CNH

(MNI Australia) USD/CNH dips sub 7.3100 were supported post the Asia close on Thursday, although we couldn't sustain moves above the 7.3200 level. We finished near 7.3140 in NY trade and we track close to this level currently. USD/CNY closed at 7.3064, while the CNY NEER (J.P. Morgan Index) firmed a touch to 122.70 (+0.11%).

  • The poor equity backdrop weighed on CNH, with the Golden Dragon index down 1.90% in US trade, the fifth straight drop. The index is back to July levels. To recap, the CSI 300 fell 0.90% yesterday to 3672, the lowest close since Nov last year.
  • Northbound stock outflows continue, with a further -4.3bn yuan in net selling yesterday. Reuters reported that regulators are probing some hedge funds and brokerages in terms of quantitative trading strategies.
  • China Premier Li Qiang also stated that the economy is at a critical juncture and called for strategic focus on economic transformation. Policy support will be provided in terms of finance, intellectual property rights and tax incentives for new enterprise development.
  • The local data calendar remains empty today.

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