Free Trial
NATGAS

Record Production Pushing US Prices Lower

CANADA

USDCAD Opens Resistance With 1.37 Handle

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

USD/CNH Dips, PBoC Warns On Inflation Risks

CNH

USD/CNH dipped in line with broader USD weakness overnight. The pair got to a low of around 6.7160/65 before support kicked in. We now sit back at 6.7270/75. Note the 50 day MA comes in at 6.7256. We are still waiting for aggregate finance figures to print for July, otherwise though the domestic data calendar in empty in China today.

  • The CNH underperformed against the yen, reversing trends seen over the past week or so. CNH/JPY is back below 19.73, with the 100 day MA in focus (this level comes in at 19.74). EUR/CNH is just below 6.9300.
  • Domestically, the focus is likely to be on local bond yields after the PBoC's quarterly report highlighted domestic inflation risks. The central bank noted 3 sources of potential inflation pressure, rising pork prices, rebounding domestic consumption and higher energy prices.
  • This comes after yesterdays below consensus inflation outcomes, with the CPI and PPI both coming in weaker than expected. Core inflation also painted a benign/soft backdrop for domestic demand.
  • In any event, the PBoC's rhetoric is likely to see market expectations of any further rate cuts tempered further. The 2yr bond yield is around 2.17%, up from recent lows sub 2.10%. The 10yr is around 2.75%.
  • US President Biden has reportedly shelved potential plans to scrap some tariffs on China. This follows Pelosi's recent trip to Taiwan, which has raised tensions between the two countries.
233 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

USD/CNH dipped in line with broader USD weakness overnight. The pair got to a low of around 6.7160/65 before support kicked in. We now sit back at 6.7270/75. Note the 50 day MA comes in at 6.7256. We are still waiting for aggregate finance figures to print for July, otherwise though the domestic data calendar in empty in China today.

  • The CNH underperformed against the yen, reversing trends seen over the past week or so. CNH/JPY is back below 19.73, with the 100 day MA in focus (this level comes in at 19.74). EUR/CNH is just below 6.9300.
  • Domestically, the focus is likely to be on local bond yields after the PBoC's quarterly report highlighted domestic inflation risks. The central bank noted 3 sources of potential inflation pressure, rising pork prices, rebounding domestic consumption and higher energy prices.
  • This comes after yesterdays below consensus inflation outcomes, with the CPI and PPI both coming in weaker than expected. Core inflation also painted a benign/soft backdrop for domestic demand.
  • In any event, the PBoC's rhetoric is likely to see market expectations of any further rate cuts tempered further. The 2yr bond yield is around 2.17%, up from recent lows sub 2.10%. The 10yr is around 2.75%.
  • US President Biden has reportedly shelved potential plans to scrap some tariffs on China. This follows Pelosi's recent trip to Taiwan, which has raised tensions between the two countries.