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CNY: USD/CNY Rises Post LNY Break, USD/CNH Edges Higher

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USD/CNY spot has re-opened higher, the pair last tracking above 7.2800. this fits with the slightly higher USD index levels we've had since the LNY break (onshore markets have been closed since Jan 27). Pre LNY lows in spot were at 7.2376, which also coincided with the simple 100-day MA. 

  • USD/CNH has gravitated higher, but is well within recent ranges, the pair last close to 7.2930, slightly weaker in CNH terms for the session. The maintains a modestly positive USD/CNH-USD/CNY basis.
  • Earlier we had the USD/CNY fixing which steady relative to pre LNY outcomes. The fixing error widened though, suggesting continued onshore push back against yuan depreciation pressures.
  • Data in terms of the Caixin services PMI has also just printed, missing estimates at 51.0 (52.4 was the forecast and 52.2 prior). This continues the Jan run of poorer PMI prints, suggesting some loss of economic momentum, although interpretation is tricky given LNY timing at the end of the month.
  • BBG notes home sales resumed falling in Jan, but that box office subscriptions were at t record high.
  • Also not helping yuan sentiment will be the lack of equity upside , with onshore markets initially opening higher before turning lower. HK markets are also weaker, as markets digest economic data/trade tariffs etc.  
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USD/CNY spot has re-opened higher, the pair last tracking above 7.2800. this fits with the slightly higher USD index levels we've had since the LNY break (onshore markets have been closed since Jan 27). Pre LNY lows in spot were at 7.2376, which also coincided with the simple 100-day MA. 

  • USD/CNH has gravitated higher, but is well within recent ranges, the pair last close to 7.2930, slightly weaker in CNH terms for the session. The maintains a modestly positive USD/CNH-USD/CNY basis.
  • Earlier we had the USD/CNY fixing which steady relative to pre LNY outcomes. The fixing error widened though, suggesting continued onshore push back against yuan depreciation pressures.
  • Data in terms of the Caixin services PMI has also just printed, missing estimates at 51.0 (52.4 was the forecast and 52.2 prior). This continues the Jan run of poorer PMI prints, suggesting some loss of economic momentum, although interpretation is tricky given LNY timing at the end of the month.
  • BBG notes home sales resumed falling in Jan, but that box office subscriptions were at t record high.
  • Also not helping yuan sentiment will be the lack of equity upside , with onshore markets initially opening higher before turning lower. HK markets are also weaker, as markets digest economic data/trade tariffs etc.