29 Apr 2014
USD/CNH; A test of 6.2450 to come? - BMO Capital Markets
FXStreet (Guatemala) - Stephen Gallo, European Head of Currency Strategy at BMO Capital explained USD/CNH saw its first lower close in about 7 sessions yesterday.
Key Quotes
"USD/CNH saw its first lower close in about 7 sessions, in what can really only be described as a modest relief rally in the CNH/CNY. PBoC fixed USD/CNY another 11 pips lower (6.1565)."
"By our calculations, that was the 4th consecutive lower fix, and the first time the fix has fallen for 4 straight days since September 2013. PBoC appears to be guiding USD/CNY away from the upper 2% band, and for the most part, this explains the general interest to buy CNH during the session."
"We expect another lower or neutral fix to tempt a test of 6.245 in USD/CNH, but we remain ultra-cautious buyers of CNH/CNY on dips at this stage. We’re not convinced PBoC will let the CNY absorb the full force of events/data this week which are a disappointment for the USD."
Key Quotes
"USD/CNH saw its first lower close in about 7 sessions, in what can really only be described as a modest relief rally in the CNH/CNY. PBoC fixed USD/CNY another 11 pips lower (6.1565)."
"By our calculations, that was the 4th consecutive lower fix, and the first time the fix has fallen for 4 straight days since September 2013. PBoC appears to be guiding USD/CNY away from the upper 2% band, and for the most part, this explains the general interest to buy CNH during the session."
"We expect another lower or neutral fix to tempt a test of 6.245 in USD/CNH, but we remain ultra-cautious buyers of CNH/CNY on dips at this stage. We’re not convinced PBoC will let the CNY absorb the full force of events/data this week which are a disappointment for the USD."