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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CNH
USD/CNH broke through Tuesday lows in recent dealings, the pair getting to a low of 7.1888. We last tracked near 7.1930/40 (Tuesday lows were just sub 7.1950). The early tone to HK and China equities looks positive, although more so for HK.
- The chart below plots USD/CNH, which is inverted on the chart, against China to rest of the world equity ratio. We are only up modestly form lows for this ratio, but nay more outperformance from China related equities should, at the least, aid CNH stability.
- The other point to note is the PBoC will issue 45bn yuan bills in HK late in Feb (30bn in the 3 month and 15bn in 1yr), with the tender on Feb 20, per BBG. This may help CNH sentiment from a liquidity standpoint.
- In terms of USD/CNH levels, the 20 to 100 day EMAs clustered between 7.1900 to 7.1990. The 200-day sits further south at 7.1660. Recent highs rest at 7.2245.
Fig 1: USD/CNH (Inverted) Versus China To World Equity Ratio
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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