USD/CNH Holding Near 7.2700, CSI 300 Equity Index Sub Simple 200-day MA

USD/CNH sits near 7.2700 in early Friday dealings, close to late US session highs from Thursday. The pair saw a brief dip towards 7.2600 on US data misses (lower PPI and higher initial jobless claims), but we quickly rebounded. We remain sub recent highs near 7.2750 in the pair. Onshore USD/CNY spot finished up at 7.2525 yesterday, so close to the upper daily trading limit.

• Broader USD gains were evident through Thursday trade, as EUR weakness, amid on-going political concerns in France, aided safe haven flows to USD. The DXY climbed over 0.50%, although the BBDXY posted a more modest rise.
• For USD/CNH, the 20-day EMA sits back near 7.2575, the 50-day around 100pips lower. The USD/CNY fix will remain in focus, although remarks from a SAFE official yesterday around continuing stability in FX don't suggest a departure from the very gradual depreciation trend.
• On the data front, we still await the May new loans/aggregate credit figures, which are expected to show improved momentum, in part due to greater fiscal spending/government bond issuance.
• On the trade front, US Presidential candidate Donald Trump reportedly raised the idea of higher tariffs to fund income tax cuts (per Bloomberg, see this link). This, along with broader trade issues, will remain a focus point in the lead up to the US election. It also comes after the EU decision to raises tariffs on China EVs.
• In the equity space, the CSI 300 ended down a further 0.51% yesterday and sub the simple 200-day MA.