Biden/Xi Call Expected To Take Place This Week

USD/CNH dipped under 6.7450 early in the overnight session but we didn't see any further follow through. The pair pushed back above 6.7550 and we spent the rest of the overnight session stuck within a rough 6.7500/6.7550 range. The pair currently tracks close to 6.7540.

• Geopolitics remains the focus in the near term, although isn’t a huge driver of USD/CNH price action at this stage.
• US President Biden stated that he expects the call with China President Xi to take place this week, although it appears details are still being worked out.
• A trip by US House Speaker Pelosi to Taiwan also hasn't been ruled out. The trip would likely take place in August as part of a broader Asia trip. Some US politicians (on the Republican side) have stated if the trip does not go ahead it would be a sign of US weakness.
• The China Politburo meeting, which should take place before the end of the month, is a domestic focus point in China. While details are often light around such meetings, the focus will be on any updates around growth targets for this year, stimulus measures, particularly from a bond issuance standpoint, support for the housing market and Covid-zero policies.
• For USD/CNH, we may continue to track broader USD sentiment, with offshore events like the FOMC decision, likely to dominate in the near term, at least until we get clarity on some of the geopolitical issues outlined above.