USD/CNH registers three-day losing streak after PBOC holds MLF rate steady
- USD/CNH stays under pressure as PBOC avoids MLF rate cut.
- Broad USD weakness contributes to the pair’s declines.
- Moves are choppy as markets turn nervous ahead of the US NFP.
USD/CNH declines to 7.0420 amid initial Friday trading. The pair extends the previous two day’s downpour after China’s central bank avoids any rate change announcements despite pumping the huge amount into the markets.
Media reports from China’s Securities Journal earlier suggested that the People’s Bank of China, (PBOC) will not announce any change to its Medium-term Lending Facility (MLF) rate of 3.25%, which was later on confirmed. The central bank injected 300 billion Chinese Yuan (CNY) in a one-year operation.
Earlier during the day, the PBOC set the Yuan reference rate at 7.0383 versus Thursday's fix at 7.0521.
Market sentiment has been choppy off-late as traders await the key November month job details from the United States (US). With this, the US 10-year treasury yields seesaw around 1.80% while stocks in Asia stay modestly bid amid rising calls of further monetary easing from global central banks and absence of trade negatives from either the US or China. The latest headlines from the US, rather a statement from Security Adviser Robert C. O’Brien, mention that both the parties are close to phase-one.
Looking at the US data, the headline Nonfarm Payrolls (NFP), expected 180K versus 128K, will gain major attention due to the upbeat forecast and the mixed signals from early indicators.
Technical Analysis
A month-old rising channel keeps limiting the pair’s moves between 7.0320 and 7.0990.