USD/CNH Rebounds, But Selling Interest Emerges Above 7.00

(MNI Australia) USD/CNH rose post the Asia close, ultimately getting back above 7.00 in NY trading before selling interest emerged. We currently track around the 6.9980 level, little changed for the session so far. The China currency slightly underperformed broader USD sentiment, which saw the NEER drop (J.P. Morgan Index), but we remain around recent ranges for this index.

• Covid concerns have derailed China related asset sentiment over the past 24 hours. The rapid re-opening, coupled with surging domestic cases, as prompted a number of countries, including the US, to raise testing requirements for travellers from the country.
• Economic sentiment also remains downbeat according to a PBoC survey, with job and income prospects plunging to fresh lows. There are tentative signs that mobility measures, like metro railway trips, have bottomed though and are starting to recover in some of the major cities, such as Beijing.
• Elsewhere, the China Dragon index lost close to 3.50% in the US session. Tencent received approval for additional games, in a sign the crackdown the tech sector may be waning further. Broader covid concerns and equity losses elsewhere likely offset this positive news though.