USD/CNH is steady in Thursday trade. Currently, the pair is trading at 6.9426, up 0.16% on the day. With a host of data out of China on Friday, we could see some stronger movement from USD/CNH before the weekend.
China numbers projected to improve
As the Covid-19 pandemic continues to cause severe economic conditions in the US and Europe, less attention has been given to China. Still, it is important to keep an eye on developments in the world’s second-largest economy. China began its pandemic recovery earlier than other countries, and economic indicators have been pointing upwards.
The week started on a positive note, as China’s CPI improved to 2.7%, up from 2.5% beforehand. Foreign Direct Investment came in at 0.5%, which ended a nasty streak of five straight declines. Will we see strong numbers on Friday? On the manufacturing front, industrial production has accelerated for four successive readings. The upward trend is projected to continue, with an estimate of 5.1%, after a read of 4.8% beforehand. Retail sales, which plunged 20.5% in February, has clawed its way higher, and is expected to post a gain of 0.5% in July. This would mark the first gain since December.
Tensions remain high between the US and China, as the Trump Administration has banned US companies from dealing with ByteDance and Tencent, two gigantic technology Chinese companies. The move hasn’t had much impact on USD/CNH, but the expected Chinese retaliation could escalate the conflict and shake up the pair.
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USD/CNH Technical
USD/CNH posted small gains in the Asian session and this trend has continued in European trade
- 6.9044 is providing support
- There is resistance at 7.003
- The 10-day MA line, which is currently slightly above the pair, remains relevant