USD/CNH picks up bids above 7.000 amid US-China jitters
- USD/CNH refrains from respecting bears as it recovers from 7.0030.
- US diplomats travel China despite the latest tussle among the global superpowers.
- Japan’s absence, market’s wait for key preliminary PMIs trigger risk reset.
USD/CNH rises to 7.0100 while taking a U-turn from the intraday low of 7.0030 during early Friday’s trading session. The quote recently gained amid risk reset. Though, bears are still keeping eyes after Thursday’s downbeat performance from over one-week high.
Reuters cites US diplomats’ abrupt rush to China, despite row over Houston consulate, to doubt the latest risk-off mood. Although the news suggests that the move could be to re-staff the American people in Beijing, markets doubt as some at the Trump administration hasn’t yet forgotten trade deal talks with the dragon nation.
Earlier in Asia, US President Donald Trump said that trade deal with China means less to him than it did while attacking the Asian major over the latest tension concerning the diplomats’ move and restrictions. Also on the same line was US Secretary of State Mike Pompeo who provided a fiery speech to lash out at Beijing.
It should be noted that the US order to the Chinese consulate to evacuate Houston triggered the latest tension among the world’s top two economies that have been at loggerheads for long over the coronavirus (COVID-19) spread.
Elsewhere, the Financial Times (FT) came out with the news that the US Senators have delayed announcing the phase 4 fiscal plan amid a lack of consent, which in turn dims prospects of any recovery in the market sentiment.
Amid all these catalysts, stocks in China extend the previous day’s losses but the S&P 500 Futures print mild gains of 0.16% to 3,232 by the press time. Further, the US 10-year Treasury yields remain on the back foot below 0.58%.
While the Chinese calendar is yet to offer any key data/events, the US Markit PMIs for July will be the key to watch today. Forecasts suggest headlines Manufacturing PMI recover from 49.8 to 51.5.
Technical analysis
Only if the pair offers a daily closing below 7.000, it can revisit the current month’s low near 6.9600. Failing to do so can keep the pair directed towards a 200-day SMA level of 7.0346.