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CNH: USD/CNH Back Above 7.2500, China Listed Equities In The US Slump

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USD/CNH spent much of Monday's US session above 7.2500. The pair tracks close to 7.2540 in early Tuesday dealings. CNH was little changed in aggregate for Monday's session, after earlier posting a low of 7.2259. Spot USD/CNY finished up at 7.2463. The CNY CFETS basket tracker edged down a little further to 99.55 (per BBG). This index has only risen on 2 trading days in Feb so far. 

  • For USD/CNH, EUR moving off its highs above 1.0500, weighed late yesterday, while in Monday US trade, the Golden Dragon index slumped 5.24%. Recent announcements by the Trump administration around curbing China investment into key sectors and looking to target China made ships (with fees) were likely headwinds for sentiment.
  • This followed only modest drops for onshore equities (-0.22% for CSI 300) and the aggregate HSI in Hong Kong (off 0.58%).
  • Trump also remarked earlier that tariffs on Mexico and Canada were moving forward. While it was also reported over the weekend the US administration had asked Mexico to tariff imports from China.
  • Market sentiment around tariff/trade tensions with the US is likely remain skittish. Last week Trump stated a trade deal with China was possible, which leaves a wide spectrum of outcomes and market reactions as possible.  
  • For USD/CNH technicals, yesterday's break sub the 200-day EMA couldn't be sustained. This support zone rests close to 7.2355. On the topside we are close to the 100-day EMA resistance point (near 7.2590).
  • On the data front, the 1yr MLF is due, but no change is expected in the 2% rate. 
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USD/CNH spent much of Monday's US session above 7.2500. The pair tracks close to 7.2540 in early Tuesday dealings. CNH was little changed in aggregate for Monday's session, after earlier posting a low of 7.2259. Spot USD/CNY finished up at 7.2463. The CNY CFETS basket tracker edged down a little further to 99.55 (per BBG). This index has only risen on 2 trading days in Feb so far. 

  • For USD/CNH, EUR moving off its highs above 1.0500, weighed late yesterday, while in Monday US trade, the Golden Dragon index slumped 5.24%. Recent announcements by the Trump administration around curbing China investment into key sectors and looking to target China made ships (with fees) were likely headwinds for sentiment.
  • This followed only modest drops for onshore equities (-0.22% for CSI 300) and the aggregate HSI in Hong Kong (off 0.58%).
  • Trump also remarked earlier that tariffs on Mexico and Canada were moving forward. While it was also reported over the weekend the US administration had asked Mexico to tariff imports from China.
  • Market sentiment around tariff/trade tensions with the US is likely remain skittish. Last week Trump stated a trade deal with China was possible, which leaves a wide spectrum of outcomes and market reactions as possible.  
  • For USD/CNH technicals, yesterday's break sub the 200-day EMA couldn't be sustained. This support zone rests close to 7.2355. On the topside we are close to the 100-day EMA resistance point (near 7.2590).
  • On the data front, the 1yr MLF is due, but no change is expected in the 2% rate.