- USD/CNY turns blind eyes on trade/political tension with the US amid PBOC news.
- The dragon nation dims trade optimism, signal political tussle with the Trump administration.
- PBOC injects CNY 300 billion against last week’s zero figure.
Despite on-going trade/political pessimism, the USD/CNY pair manages to take the bids near 7.0394 during early Friday.
The reason is the weekly open market operations by the People’s Bank of China’s (PBOC). The Chinese central bank recently conveyed that it injected a net 300 billion Chinese Yuan (CNY), via open market operations, during this week compared to no net injection or withdrawal last-week. The news broke after the PBOC announced daily Yuan reference rate of 7.0312 versus 7.0268 prior.
With this, investors mostly ignored China’s media that kept beating the drums against the US President Donald Trump’s claim that he doesn’t think China will retaliate against the latest tariffs. Media releases from China also seem to directly warning the US to not interfere in Hong Kong issue.
Recently, Fed policymakers have crossed the wires while conveying their dovish bias. Though, markets might have taken the PBOC injection more seriously that the Fed speaks.
The US housing market data and the Michigan Consumer Sentiment Index will decorate economic calendar during the day while trade/political news can offer intermediate moves.
Technical Analysis
Prices are likely heading towards 7.0700 mark before highlighting the prospects of a run-up towards March 2008 high near 7.11. On the contrary, 7.0000 and June month high near 6.9357 can please sellers during the quote’s declines.
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