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USDCNH Pierces Overnight Lows as Urgency Grows to Resolve Property Crisis

CNH
  • USDCNH briefly pierced the overnight lows, putting the pair within close proximity of Tuesday's and Wednesday's lows in the 7.2000-7.2100 region, before partially paring losses.
  • As well as broad USD weakness and general risk-on supporting the move lower, reports that the CSRC will meet with property firms and financiers tomorrow to discuss the real estate market will have brought forward expectations of possible policy action.
  • The reports come in the wake of Country Garden's failure to pay interest payments to bondholders - a possible precursor to another potential default event in the Chinese property market.
  • China’s major equity indices ended the APAC session marginally in the green, though had been tracing lower for the majority of the session ahead of the European open. Stronger energy stocks – which have been buoyed by the recent bounce in oil – provided support.

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