CNH: Spot USD/CNH Lower, But Still Lagging Majors Amid Weak USD Sentiment
Spot USD/CNH tracks near 7.2000 in early Thursday dealings. CNH rose 0.15% for Wednesday's session, as broader USD sentiment remained on the backfoot. All G10 currencies rose versus the USD, amid fiscal concerns (which drove a steeper US Tsy curve), while US equities also weakened. The DXY is off around 0.50%, the BBDXY index lost 0.30% for Wednesday. Spot USD/CNY finished up at 7.2015. The CNY CFETS basket tracker lost a further 0.23% to 96.33 (per BBG). Recent lows in this index sit around 95.70.
- For spot USD/CNH, we are maintaining a fairly low beta to this fresh round of USD weakness. Downside focus in the pair is likely to be on a re-test on recent lows sub 7.1800. Upside interest is unlikely to be shifted until we breach back above 7.2500.
- CNH/JPY maintained its recent downtrend, the pair consolidating sub 20.00, while EUR/CNH is close to 8.1600 (intra session highs from Wednesday were at 8.1823). CNH may continue to underperform on key crosses amidst a broadly softer dollar backdrop.
- The China to global equity ratio has ticked higher, amid renewed US equity market weakness. The market is nervous as the Republicans look to pass Trump's tax bill, which will add to debt (and is driving a steeper Tsy curve). Still, in Wednesday US trade the Golden Dragon lost a further 0.72%, down for the third straight session. Onshore equities have traded better (the CSI 300 up 0.47% yesterday).
- On the data front today we have Swift global payments in CNY, with the March outcome at 4.13% (off recent highs of 4.74%). We also await the Apr FDI figures.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
GOLD: Another Record High, Gold Surges Through $3400
Gold remained on the front foot through Monday trade, albeit in limited liquidity with EU markets still closed. We track near $3424 in early Tuesday dealings, just off session highs from Monday (3430.60), which was a fresh record high. Gold gained 2.92% for Monday's session with broad USD weakness, coupled with risk off in the US equity space driving gains.
- The RSI (14) on gold is in overbought conditions, last above 77, but we have been in this state on numerous occasions already in 2025, with the market comfortable buying gold dips. We have the 20-day EMA back under $3190. Lows from the end of last week were at $3284.
- Topside focus is likely to rest on round figure resistance at $3500. Note Goldman Sachs stated bullion could hit $4000 by mid next year (via BBG).
- US Tsy yields were sharply higher at the back end of the curve, the 10yr up 9bps to 4.41% in Monday trade. President Trump comments berated Fed Chairman Powell and reiterated a call for "preemptive cuts". This raised fears of Fed independence and added to the negative risk mood. The SPX fell 2.36%.
ASIA: Coming Up In Asian Markets On Tuesday
| 0900BST | 1600HKT | 1800AEST | Taiwan Mar Export Orders |
| 0900BST | 1600HKT | 1800AEST | Taiwan Mar Unemployment Rate |
| China Mar FX Net Settlement | |||
| Malaysia FX Reserves |
ASIA: Coming Up In Asia Pac Markets On Tuesday
| 2345BST | 0645HKT | 0845AEST | New Zealand Mar Trade |
| 0335BST | 1035HKT | 1235AEST | New Zealand Bill sale |
