USD/CNH slips from three-day high to below 6.9800 following clarifications on coronavirus
- USD/CNH reverses the early-day surge, still on the front foot for the second day.
- Additional details of Hubei’s surge in coronavirus cases, China’s efforts to tame the epidemic play their roles.
- Economics from the US and coronavirus updates could entertain the momentum traders ahead of Friday’s China data.
USD/CNH steps back from the intra-day high of 6.9926 to 6.9800 during the initial Chinese market open on Thursday. While a spike in coronavirus related dead/infected cases triggered the pair’s early-day rise, revelations about the details and comments from the dragon nation’s UN envoy seem to placate the traders off-late.
Early in Asia, coronavirus statistics from Hubei suggested a two-fold increase in the death toll to 1,310 with 14,840 being the number of new cases.
Following the release, risk sentiment grew against the commodities and riskier assets fearing a sudden outbreak in cases that were earlier seemed to recede.
However, it was later on revealed that the province recently conducted investigations on suspected cases and revised the diagnosis results, and newly diagnosed patients were diagnosed according to the new diagnosis classification.
Also countering the risk-off mode were comments from China’s envoy to the United Nations (UN). The Asian leader’s “top envoy to the UN gave a comprehensive overview of the country's efforts to fight novel coronavirus pneumonia, saying that China's efforts are achieving positive results and that it has the ability and confidence to defeat the outbreak,” as per The China Daily.
As a result, the risk barometers like the US 10-year treasury yields and stock in Asia are now recovering the earlier losses.
Traders will now keep eyes on the coronavirus headlines for fresh impulse while also taking clues from the US Consumer Price Index data ahead of China’s January month Industrial Production and Retail Sales, up for publishing on Friday 02:00 GMT.
Technical Analysis
The USD/CNH pair seems to struggle between 21-day EMA and a seven-day-old falling trend line, respectively around 6.9685 and 7.0055.