USD/CNH Shows Above 7.32

A light bid in the broader USD took USD/CNH through yesterday’s session peak and above CNH7.3200.

• Familiar medium-term technical parameters in USD/CNH remain untouched.
• Higher and steeper U.S. Tsy yields have supported the greenback on the day.
• Still, the move above the figure has been limited thus far.
• RTRS sources recently noted that the PBoC has instructed Chinese state banks to roll over local government loans with lower and longer term interest rates, as it tries to alleviate well-documented local government fiscal pressures. The sources also noted that the PBoC will set up an emergency liquidity tool for banks (with a 2-year loan maturity in play). This had little lasting impact on USD/CNH.
• Looking ahead, the Shanghai Securities News covered analysts comments flagging expectations for China to continue boosting credit toward the end of this year to help drive an economic recovery.
• HK-China Stock Connect flows were still tilted towards net selling of mainland equities (albeit at a more tepid pace of CNY3.1bn today). This would have provided some background headwinds for CNH.
• Q3 GDP and monthly economic activity data headline the Chinese data docket on Wednesday.