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USD/CNH Pushes Above 7.2700, Fresh Highs Back To Mid April

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USD/CNH mostly tracked higher post the Asia close. Highs above 7.2750 drew selling interest but pull backs were modest. We track near 7.2730 in early Thursday dealings, after CNH lost 0.14% yesterday. Spot USD/CNY ended just above 7.2490.

  • The yuan faltered amid continued broad based dollar gains, with rising yields and weaker global equities providing support for the greenback. Still CNH's loss was modest relative to the BBDXY's 0.48% gain for Wednesday.
  • For USD/CNH mid April highs at 7.2831, which also marked YTD highs for the pair. The 20-day EMA is back near 7.2480.
  • The CNH-CNY basis has widened further, back close to +240pips. Focus will remain on the USD/CNY fixing, which nudged to fresh multi month highs yesterday (to 7.1106).
  • CNY options activity was noticeable yesterday. USD/CNY demand was evident, in particular for 7.3000 call strikes, although 7.25, 7.28 and even 7.69 calls also saw decent interest yesterday.
  • Sell-side analysts have also noted dividend related outflows ahead of month end for the yuan (per BBG).
  • The local data calendar remains quiet until official May PMIs print tomorrow.
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USD/CNH mostly tracked higher post the Asia close. Highs above 7.2750 drew selling interest but pull backs were modest. We track near 7.2730 in early Thursday dealings, after CNH lost 0.14% yesterday. Spot USD/CNY ended just above 7.2490.

  • The yuan faltered amid continued broad based dollar gains, with rising yields and weaker global equities providing support for the greenback. Still CNH's loss was modest relative to the BBDXY's 0.48% gain for Wednesday.
  • For USD/CNH mid April highs at 7.2831, which also marked YTD highs for the pair. The 20-day EMA is back near 7.2480.
  • The CNH-CNY basis has widened further, back close to +240pips. Focus will remain on the USD/CNY fixing, which nudged to fresh multi month highs yesterday (to 7.1106).
  • CNY options activity was noticeable yesterday. USD/CNY demand was evident, in particular for 7.3000 call strikes, although 7.25, 7.28 and even 7.69 calls also saw decent interest yesterday.
  • Sell-side analysts have also noted dividend related outflows ahead of month end for the yuan (per BBG).
  • The local data calendar remains quiet until official May PMIs print tomorrow.