- USD / CNH remains under pressure around the week’s low, fades and bounces off the intraday low.
- Discussions between the United States and China highlight the need for communication and coordination on macroeconomic policies.
- The PBOC injects 190 billion yuan for the second day in a row.
- Market sentiment encourages equity rally, hopes of recovery ahead of key data / events.
The USD / CNH remains lower for the fourth day in a row Tuesday morning. In doing so, the offshore Chinese currency pair (CNH) is taking advantage of the risky mood while also relying on news regarding Sino-U.S. Dialogues and moves by the People’s Bank of China (PBOC).
Early Tuesday in Asia, Chinese Vice Premier Liu He met via video conference with US Treasury Secretary Janet Yellen and spoke about the macroeconomic situation and bilateral relations, according to a reading of actions by the Chinese Ministry of Commerce by Reuters. The newspaper quotes the reading as saying, “Both sides said it was important for the two countries to strengthen communication and coordination on macroeconomic policies,” to print fruitful discussions.
In addition, the PBOC injected 200 billion yuan into the banking system via a seven-day reverse repurchase agreement on Tuesday when reverse repo contracts valued at 10 billion yuan expired, suggesting a net injection of cash. of 190 billion yuan. It becomes the second day in a row that the Chinese central bank has intervened in the markets to keep them liquid.
Elsewhere, firmer impressions of US stock indexes joined the rally in a few quotes from Chinese Evergande to keep markets bullish. It should be noted that the S&P 500 Futures updates the all-time high and the 10-year US Treasury yields break the two-day downtrend at the time of release, helping the DXY maintain the previous day’s rebound from the highest. monthly low.
However, the hawkish Fedspeak ahead of the blackout period and the cautious ahead of the Q3 U.S. GDP advance reading are probing market bulls, also defying USD / CNH bears.
Continuing, USD / CNH traders should pay attention to other qualitative stocks ahead of US GDP data for new direction. Given the risky mood and the US dollar’s failure to stay strong, the Chinese currency pair appears to be aiming for the year’s low of late.
Unless breaking through the previous support line from mid-July, around $ 6.3980 at press time, USD / CNH traders remain tilted towards the annual low of $ 6.3524.