CNH has remained on the front foot during the first half of trading today. USD/CNH is back sub 6.7600, last tracking around 6.7570, -0.30% versus the NY close. The latest impetus has come from the decent beat of the Caixin services PMI (55.5 versus 53.9 expected). This is highs for the services PMI back to April 2021. The detail in the survey was mixed, with the labour market remaining under pressure. Still, given the services PMI is more domestically orientated, the outcome, at the very least paints a resilient domestic demand backdrop through July, particularly amidst on-going Covid restriction in key cities.
- Onshore equities in China are also tracking higher, with the CSI up +1% at one stage, but gains have been pared.
- On the downside in USD/CNH, dips in the pair sub 6.7400 have been supported since the middle of July. So be mindful of this level if we test further to the downside.