May 20, 2024 22:18 GMT
USD/CNH Uptrend Persists, Back Above All Key EMAs
CNH
USD/CNH maintained a steady upside bias post the Asia close on Monday. We currently track around 7.2460, just off session highs from Monday NY trade. CNH lost nearly 0.20% on Monday. USD/CNY finished up at 7.2354, not too off highs from last week.
- Broader USD sentiment was positive on Monday, albeit with the BBDXY posting a modest 0.12% gain, as US yields drifted higher. Fed speak reiterated that restrictive policy needs further time to do its work (Vice Chair Barr).
- For USD/CNH we are back above all key EMAs, the 20-day sits back near 7.2360. Earlier intra-session May highs close to 7.2550 may be the next upside target.
- Focus is likely to remain on how the authorities handle the step up in capital outflow pressures. April showed a sharp rise in foreign currency to bank clients (back to levels last seen in Dec 2016).
- The USD/CNY fixing remains very steady, wedged above 7.1000, thereby limiting onshore spot to a degree.
- The local data calendar is empty until Thursday's Swift global payments in CNY figures. Otherwise, we have to wait until next Monday for April industrial profits data.
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