Trade Data Out Today, Yellen Hints At Tariff Changes

USD/CNH spent most of the post-Asia session pushing higher. We got to 6.7000, which is where we have been in early trade today. Dips sub 6.6900 were supported.

• Higher USD/JPY levels helped drag USD/CNH higher, with CNH seeing modest underperformance against the rest of the Asian FX bloc.
• The May trade surplus is expected to improve to $57.70bn from $51.12bn. Note FX reserves for May rose to $3127.7bn from $3119.7bn in April, which suggests a resilient overall BoP picture.
• Export growth is forecast to rise to 8.0% YoY (versus 3.9% previously), while import growth is expected at 2.8% (versus flat). As we noted yesterday though, the China commerce ministry highlighted headwinds around the trade outlook.
• Overnight, comments made by US Treasury Secretary Janet Yellen were in focus. She stated the Biden administration is looking to reconfigure China tariffs. Tariffs imposed by the Trump administration under section 301 of the Trade Act didn't serve the US's strategic interests.
• No timetable was given for any changes, although Yellen stated something could happen in the next few weeks. This comes after conflicting reports from within the administration on the course of tariff policy in recent weeks.