USD/CNH recovers from six-week low amid recovery in trade sentiment
- USD/CNH manages to bounces off as risk-tone recovers.
- Global policymakers stay ready to confront the pandemic, coronavirus keeps spreading outside China.
- Chinese car sales plunge 80%, PBOC is expected to conduct OMO this month.
USD/CNH rises 0.20% to 6.9355 as Chinese markets open for trading on Thursday. The off-shore yuan pair manages to cheer the recent risk-recovery amid hopes the global policymakers will be able to ward off the negative impacts of coronavirus (COVID-19). Though, downbeat statistics at home keep flashing negative signals for the quote.
In addition to China’s multi-billion dollar liquidity infusion, rate alterations from the top-tier western/Asian central banks and announcements of emergency funding bill show that the macro decision-makers aren’t quiet about the pandemic and will be able to tackle it soon.
Even so, the latest numbers suggest a widespread outbreak of the disease outside China whereas emergency in California also portrays the grave concerns.
That said, the market’s risk-tone seems to have been recovering off-late with the US 10-year treasury yields extending bounce off record low to 1.026% while Asian markets are mildly positive by the press time.
On the economic front, Chinese PMIs, for the month of February, has dropped to the record low while car sales slumped 80%. Alternatively, the US numbers have been positive off-late.
Technical Analysis
Unless breaking a 200-day EMA level of 6.9710 on a daily closing basis, odds of the pair’s gradual declines towards 6.9000 can’t be denied.