USD/CNH sellers approach 6.7800 as options market run most bearish since August 2021

USD/CNH prints a three-day downtrend as bears attack $6.7800 heading into Tuesday’s European session.

In doing so, the offshore yuan currency (CNH) pair tracks bearish signals from the options market as a one-month risk reversal (RR) ratio of calls to put drops the most since August 2021.

That said, the daily RR print also drops for the fifth consecutive day while flashing a 0.3000 negative figure.

The reason could be linked to the broad US dollar weakness, as well as cautious optimism in China due to likely improvement in covid conditions. The softer USD, however, needs validation from today’s US Retail Sales for April, expected at 0.7% versus 0.5% prior, as well as a speech from Fed Chairman Jerome Powell.

Also read: Asian Stock Market: Covid, tech updates underpin cautious optimism amid growth fears