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USD/CNH Moves Down From Recent Highs

CNH

USD/CNH is seeing some downside traction in the first part of trade today. The pair was last near session lows in the 7.2160/70 region. This is around 0.2% firmer in CNH terms versus Wednesday NY closing levels. The 20-day EMA sits back in the low 7.2000 region. A softer USD tone more broadly is likely helping sentiment.

  • Tencent CEO Pony Ma also published an onshore piece stating that China's new guidelines on the private sector will drive confidence. This follows yesterday's statement from the authorities to boost the private economy and protect businesses (see this link).
  • The market will likely be watching the equity market reaction for potential further positive spill over to CNH (both in HK and on the Mainland). We did see the Golden Dragon Index nearly 0.70% higher in Wednesday US trade.
  • We have the LPR rate decisions (no change expected) and the CNY fixing coming up shortly.

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