Free Trial
ASIA FX

USD/Asia Pairs Mostly Lower, IDR Lags

FOREX

USD Stays On The Back Foot

GOLD

Gold Price Advance As USD Softens

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

USD/CNH Slumps On Intervention Risk, PMIs On Tap Today

CNH

USD/CNH faltered above 7.2100 late yesterday. We fell sharply to 7.1500 on a Reuters report that state banks were asked to prepare to sell dollars in offshore markets. Through the NY session the pair dipped further, aided by EUR and GBP strength against the USD. We now sit under 7.1000. On tap today is the September PMI prints.

  • According to the Reuters report this round of intervention could be large. The authorities perhaps have one eye on next week, when onshore markets are closed (hence there will be no USD/CNY anchor point for the CNH market).
  • There certainly appears to resistance to USD/CNH (and USD/CNY) weakening much beyond 7.2000 in the near term. The intervention warning overnight comes after the hike in the forward reserve requirement and reintroduction of the counter cyclical factor in the CNY fixing this week.
  • Spot USD/CNY ended the onshore session at 7.1249 (the 4:30pm level was much higher though at 7.2000).
  • Today's domestic data focuses on the PMI prints for September, see this note for more details. The market expects a further modest improvement in manufacturing (49.7 from 49.4), but a slip in services (52.4 from 52.6).
192 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

USD/CNH faltered above 7.2100 late yesterday. We fell sharply to 7.1500 on a Reuters report that state banks were asked to prepare to sell dollars in offshore markets. Through the NY session the pair dipped further, aided by EUR and GBP strength against the USD. We now sit under 7.1000. On tap today is the September PMI prints.

  • According to the Reuters report this round of intervention could be large. The authorities perhaps have one eye on next week, when onshore markets are closed (hence there will be no USD/CNY anchor point for the CNH market).
  • There certainly appears to resistance to USD/CNH (and USD/CNY) weakening much beyond 7.2000 in the near term. The intervention warning overnight comes after the hike in the forward reserve requirement and reintroduction of the counter cyclical factor in the CNY fixing this week.
  • Spot USD/CNY ended the onshore session at 7.1249 (the 4:30pm level was much higher though at 7.2000).
  • Today's domestic data focuses on the PMI prints for September, see this note for more details. The market expects a further modest improvement in manufacturing (49.7 from 49.4), but a slip in services (52.4 from 52.6).