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Yuan Trims Gains After PBoC RRR Cut

CNH

Spot USD/CNH has trimmed losses as the PBOC announced a 25bp cut to its reserve requirement ratio (see more details here) effective March 27. The pair last deals -113 pips at CNH6.8841, with bears looking for a break below the 50-DMA at CNH6.8375 after piercing that moving average but failing to close below it on Mar 13.

  • USD/CNY sits -127 pips at CNY6.8853 and bears would be pleased by a move through the 50-DMA, which intersects at CNY6.8438. Below there we have a key trendline which capped gains in December and then turned into a support this year, it kicks in at CNY6.8242.
  • In other news, Chinese President Xi Jinping will visit Moscow at the beginning of next week. It will be his first trip to Russia since President Vladimir Putin ordered a full-scale invasion of Ukraine.

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