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CNH: USD/CNH Supported Sub 7.2800, LPRs Seen On Hold Today

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USD/CNH saw a brief sup sub 7.2800 as US trade unfolded on Wednesday. Headlines crossed from the NY Times around US President Trump being interested in a trade deal with China. "Mr. Trump has expressed interest in a deal that would include substantial investments and commitments from the Chinese to buy more American products" (see this link). However, we quickly rebounded and hold above 7.2830 in early Thursday dealings. CNH lost a modest 0.10% for Wednesday's session, in line with an uptick in USD indices as EUR softened with EU equity losses. 

  • Spot USD/CNY finished up at 7.2788, while the CNY CFETS basket tracker edged slightly lower to 99.98 (per BBG).
  • For USD/CNH technicals, we remain wedged under the 20 and 50-day EMAs (close to 7.2860 and 7.2890). Wednesday intra-session highs printed at 7.2931, but we couldn't sustain this move. The 100-day EMA remains close to 7.2600.
  • Today locally, we have the 1yr and 5yr loan prime rate decision. No change is expected in either rate, the 1yr currently 3.10%, the 5yr at 3.60%.
  • Focus will remain on China/HK equity trends. Hong Kong markets eased yesterday, with the HS China Enterprise index also down slightly. Mainland investors still poured in HK$10.3bn in Hong Kong shares though. In Wednesday US trade, the Golden Dragon Index fell modestly.  This index has retraced after failing to breach the 8000 level.
  • The CSI 300 still rose 0.70% on Wednesday to 3940 in index terms, just below recent highs. 
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USD/CNH saw a brief sup sub 7.2800 as US trade unfolded on Wednesday. Headlines crossed from the NY Times around US President Trump being interested in a trade deal with China. "Mr. Trump has expressed interest in a deal that would include substantial investments and commitments from the Chinese to buy more American products" (see this link). However, we quickly rebounded and hold above 7.2830 in early Thursday dealings. CNH lost a modest 0.10% for Wednesday's session, in line with an uptick in USD indices as EUR softened with EU equity losses. 

  • Spot USD/CNY finished up at 7.2788, while the CNY CFETS basket tracker edged slightly lower to 99.98 (per BBG).
  • For USD/CNH technicals, we remain wedged under the 20 and 50-day EMAs (close to 7.2860 and 7.2890). Wednesday intra-session highs printed at 7.2931, but we couldn't sustain this move. The 100-day EMA remains close to 7.2600.
  • Today locally, we have the 1yr and 5yr loan prime rate decision. No change is expected in either rate, the 1yr currently 3.10%, the 5yr at 3.60%.
  • Focus will remain on China/HK equity trends. Hong Kong markets eased yesterday, with the HS China Enterprise index also down slightly. Mainland investors still poured in HK$10.3bn in Hong Kong shares though. In Wednesday US trade, the Golden Dragon Index fell modestly.  This index has retraced after failing to breach the 8000 level.
  • The CSI 300 still rose 0.70% on Wednesday to 3940 in index terms, just below recent highs.