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CNH: USD/CNH Steady Near 7.3450, PBoC Continues To Emphasize FX Stability

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USD/CNH didn't deviate too far out of the 7.3400/7.3500 range post the Asia close on Tuesday. The pair tracks around 7.3450 in early Wednesday dealings (little net change was seen on Tuesday). Spot USD/CNY held above 7.3300, but sits slightly off recent highs. The CNY CFETS basket tracker was also little changed Tuesday, ending at 101.63 (per BBG). 

  • For USD/CNH we remain above the 20-day EMA support point, which was last near 7.3290. Recent highs near 7.3650 remain intact on the topside.
  • We had Dec new loans and aggregate finance data print late yesterday. The headlines were better than expected, although the details show the result was driven by stronger government bond issuance. Loan demand from the private sector was weak through 2024 as a whole though.
  • Other data showed capital outflow pressures were evident late in 2024 in terms of the FX settlement data for Dec. The settlement ratio fell back to 60% from recent highs of 70% in Sep last year.
  • Elsewhere, the People’s Bank of China will take further measures to ensure a stable yuan exchange rate while strengthening counter-cyclical moves to support the economy, deputy-governor Xuan Changneng told a press conference on Tuesday. This is line with rhetoric from earlier in the week.
  • Incoming US President Trump stated an External Revenue Service would be created to collect tariff duties (although details were light, see this BBG link). This comes after yesterday's BBG report that gradual tariff hikes were being considered by Trump's key economic advisors.
  • The China data calendar is empty today. 
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USD/CNH didn't deviate too far out of the 7.3400/7.3500 range post the Asia close on Tuesday. The pair tracks around 7.3450 in early Wednesday dealings (little net change was seen on Tuesday). Spot USD/CNY held above 7.3300, but sits slightly off recent highs. The CNY CFETS basket tracker was also little changed Tuesday, ending at 101.63 (per BBG). 

  • For USD/CNH we remain above the 20-day EMA support point, which was last near 7.3290. Recent highs near 7.3650 remain intact on the topside.
  • We had Dec new loans and aggregate finance data print late yesterday. The headlines were better than expected, although the details show the result was driven by stronger government bond issuance. Loan demand from the private sector was weak through 2024 as a whole though.
  • Other data showed capital outflow pressures were evident late in 2024 in terms of the FX settlement data for Dec. The settlement ratio fell back to 60% from recent highs of 70% in Sep last year.
  • Elsewhere, the People’s Bank of China will take further measures to ensure a stable yuan exchange rate while strengthening counter-cyclical moves to support the economy, deputy-governor Xuan Changneng told a press conference on Tuesday. This is line with rhetoric from earlier in the week.
  • Incoming US President Trump stated an External Revenue Service would be created to collect tariff duties (although details were light, see this BBG link). This comes after yesterday's BBG report that gradual tariff hikes were being considered by Trump's key economic advisors.
  • The China data calendar is empty today.