USD/CNH probes 7.0300 as Chinese traders weigh trade data, shift in risk tone
|- USD/CNH stops the previous three days’ declines.
- Disappointment from China data, increasing uncertainty ahead of US tariffs and signs of protests in Hong Kong all play their roles.
- The risk tone stays sluggish ahead of the key week.
USD/CNH takes the bids to 7.0300 as Chinese markets open for Monday’s trading. Traders might have reacted to the weekend data from China while trade pessimism and negative headlines from Hong Kong could have acted as additional forces.
China’s November month Exports fell unexpectedly to -1.1% versus +1.0% forecast whereas Imports rose, +0.3% against -6.4% prior, for the first time since April. Further, Trade Balance of $38.73B lagged behind $46.3B market consensus.
Even so, China’s Global Times shrugs of the trade war with the United States (US) to be the reason to worry. Also contributing to the risk-off was the Financial Times (FT) report suggesting Beijing’s order to all government offices to stop using foreign personal computers (PCs) and software within a time span of three years. Additionally, Bloomberg reported the news of the biggest pro-democracy protest in months on Sunday while anticipating more unrest to follow in 2020.
Given the market’s uncertain times ahead of the US decision on December 15 tariffs on the Chinese goods, such downbeat headlines weigh on risk tone and stop the US 10-year treasury yields around 1.84%, ignoring the Friday’s run-up.
Investors will now keep eyes on trade headlines and the US reaction to the Hong Kong protests, not to forget China’s restrictions on PC and software usage, for fresh impulse.
Technical Analysis
A four-week-old rising trend line near 7.0220 limits the pair’s immediate declines towards early-November lows near 6.9920. Alternatively, November 11 top around 7.0535 can limit the pair’s short-term upside.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.