USD/CNH Stops Short Of 7.00

(MNI Australia) CNH couldn't escape broader USD gains post Powell, but USD/CNH stopped short of breaking back above 7.00. The pair reached a high just above 6.9950. We sit just below these levels currently (last around 6.9940). This left CNH 0.63% weaker for Tuesday's session, outperforming broader USD gains (DXY +1.20%). The NEER rose 0.20% to 125.47 (J.P. Morgan Index).

• The data calendar is empty today, note tomorrow we get Feb CPI and PPI data.
• Focus remains on the NPC with reasonably hawkish comments directed towards the US from new Foreign Minister Qin Wang that tensions risk blowing past any guardrails in the relationship. President XI also stated the country is grappling with containment from western countries led by the US (per Bloomberg reports, see this link).
• As the NPC progresses the authorities may wish to prevent a sharp depreciation in CNH, although late last week the PBoC Governor stated that the 7.00 level was no longer a psychological barrier. We will watch today's CNY fixing for any sign of push back.
• In the equity space the China Dragon Index fell by -3.01% for Tuesday's session. This followed weakness in onshore equities yesterday, with the CSI 300 off nearly -1.46%.