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CNH: USD/CNH Close To 20-day EMA Support, Eyes On Early Trump Executive Orders

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On Friday, CNH was in focus following headlines of a Trump/Xi phone call. Descriptions of a positive tone for China/US relations provided a boost for the Chinese Yuan. USD/CNH fell from around 7.3580 to 7.3330 very quickly, before then stabilizing. The pair closed around 7.3415 on Friday, but we track a touch lower in early Monday dealings, last near 7.3360. For USD/CNH, we are close to the 20-day EMA support point, which rests at 7.3330. 

  • Onshore USD/CNY spot ended near 7.3250 on Friday, while the CNY CFETS basket tracker was close to unchanged, ending last week at 101.35 (per BBG).
  • CNH, and broader market sentiment, will remain very sensitive to any tariff related developments out of the US, with Trump's inauguration later. Focus will be on early Trump executive orders, with reports he will sign up to 100 orders on Day 1, by far the largest raft of actions ever taken by a new president. Trump could feasibly impose new tariffs on Day 1, by invoking authority under the International Emergency Economic Powers Act (IEEPA) of 1977.  Still, border security and immigration-related orders are likely to make up the bulk of Day 1 actions.
  • Weekend reports also noted that Trump has told his advisors he would like to travel to China after taking office, although no final decision has been made on such a trip (per the WSJ). This will be a focus point over coming weeks, although yuan could still weaken in the interim on any fresh US tariff action.
  • Outside of US developments, locally in China today we have the 1yr and 5yr loan prime rates. No change is expected in either rate, with the 1yr currently at 3.10%, the 5yr at 3.60%. 
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On Friday, CNH was in focus following headlines of a Trump/Xi phone call. Descriptions of a positive tone for China/US relations provided a boost for the Chinese Yuan. USD/CNH fell from around 7.3580 to 7.3330 very quickly, before then stabilizing. The pair closed around 7.3415 on Friday, but we track a touch lower in early Monday dealings, last near 7.3360. For USD/CNH, we are close to the 20-day EMA support point, which rests at 7.3330. 

  • Onshore USD/CNY spot ended near 7.3250 on Friday, while the CNY CFETS basket tracker was close to unchanged, ending last week at 101.35 (per BBG).
  • CNH, and broader market sentiment, will remain very sensitive to any tariff related developments out of the US, with Trump's inauguration later. Focus will be on early Trump executive orders, with reports he will sign up to 100 orders on Day 1, by far the largest raft of actions ever taken by a new president. Trump could feasibly impose new tariffs on Day 1, by invoking authority under the International Emergency Economic Powers Act (IEEPA) of 1977.  Still, border security and immigration-related orders are likely to make up the bulk of Day 1 actions.
  • Weekend reports also noted that Trump has told his advisors he would like to travel to China after taking office, although no final decision has been made on such a trip (per the WSJ). This will be a focus point over coming weeks, although yuan could still weaken in the interim on any fresh US tariff action.
  • Outside of US developments, locally in China today we have the 1yr and 5yr loan prime rates. No change is expected in either rate, with the 1yr currently at 3.10%, the 5yr at 3.60%.