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USD/CNY Firms, Close To Friday Highs Near 7.2300

CNY

Early spot USD/CNY impetus has been to the topside. The pair currently near 7.2270, not too far off Friday session highs near 7.2300. The CNY fixing was close to steady (still under 7.1000), while the fixing error widened. Still, this hasn't been enough to improve sentiment.

  • BBG noted state banks became more aggressive USD sellers yesterday on the break above 7.2100. This is likely to remain a near term focus point, particularly being close to Friday highs.
  • Not helping sentiment is a weaker HK/China onshore equity backdrop. The HSI is off around 1%, with tech weakness evident amid earnings concerns, while a delayed IPO for part of Alibaba's business is also a headwind.
  • Feb industrial profits for China showed sequential improvement to 10.2% ytd y/y from -2.3% in Jan
  • For USD/CNH we are back to 7.2560, still some distance sub recent highs above 7.2800.

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