Technical Analysis

Chinese yuan holds steady as China boosts vaccination for the elderly

There was a mild dip in the yuan to the news here, with USD/CNY moving up from 7.1660 to 7.1750 before coming back down now to around 7.1640 levels on the day. Chinese equities are still largely holding on to gains and the overall risk mood is keeping more positive as we look towards European trading today.

So far, there’s no backlash yet as investors still remain hopeful and optimistic about China’s eventual re-opening.

That said, I would not have been surprised if markets actually felt somewhat ‘disappointed’ by the headlines – even if a boost to elderly vaccination is a step in the right direction in the re-opening process.

For now, Chinese markets are signaling further calm – for now at least – and that is helping to keep broader market sentiment in a decent spot. It will be interesting to see how traders and investors take to things once Chinese markets are closed later. Month-end trading will not make it that much easier as well in navigating price action in the sessions ahead.

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