Yuan Treads Water, Caixin Services PMI Beats Expectations

Spot USD/CNH has wavered, with the above-forecast headline Caixin Services PMI reading failing to result in any notable, sustained price swings. The pair last operates at CNH6.3760, little changed on the day, after a brief foray into negative territory.

• China's December Caixin Services PMI printed at 53.1, unexpectedly indicating an acceleration in the rate of expansion. However, Caixin pointed to a decline in business confidence amid "scattered Covid-19 flare-ups."
• On that note, Xinhua reported that Xi'an has halted all international and domestic flights in a bid to contain the spread of the virus.
• China's Premier Li called for deeper tax cuts to ensure steady economic growth in Q1 as downward pressures are mounting. He did not offer any details of the proposed cuts as of yet.
• From a technical perspective, bears look for a slide through Dec 31 low of CNH6.3379 before taking aim at Dec 8 low of CNH6.3305. On the flip side, a break above the 50-DMA at CNH6.3666 would shift focus to Dec 17 high of CNH6.3939.