USD/CNH Lower After Test Of Cycle Highs

USD/CNH now sits over 300 pips shy of best levels, and ~120 pips lower on the day at CNH6.7445. Once again, there hasn’t been much in the way of notable headline flow, with the earlier defensive moves that were witnessed in the wider macro market sphere resulting in a test of USD/CNH cycle highs before the aforementioned pullback. Chinese equity indices have reversed their early gap lower and more, with a powerful recovery in Chinese tech (as proxied by the ChiNext index) noted. Still, there hasn’t been much in the way of visible offshore support for the Chinese equity space, with the northbound legs of the Hong Kong/China Stock Connect schemes currently on track to record the biggest day of net outflows from mainland shares observed since Mar 21 (~CNY6.7bn of net sales have been recorded via those channels as of typing).