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24 Feb 2015
DXY volatility due to Greece to impact USD/CNH – BMO
FXStreet (Barcelona) - Greg Anderson and Stephen Gallo of BMP Capital Markets, explain that with USD/CNH tracking DXY closely, any significant moves in DXY due to Greece might impact USD/CNH modestly.
Key Quotes
“USDCNH has continued to track moves in the DXY fairly closely, so until Wednesday, any significant moves in the value of DXY related to Greece will have at least a modest impact on USDCNH.”
“We would expect 6.2875/6.2900 resistance to be challenged quickly if there is no resolution to the Greek situation by Wednesday and the HSBC Manufacturing PMI due for release on the same day comes in below the 49.0 mark.”
“The move up in USDCNH from the 6.2400/6.2500 area early last week was in part driven by liquidity. PBoC supplied some additional liquidity in February to tide the banking system over through the New Year period, but not enough to force the 7 -day repo rate back below its 30-day moving average (4.2%).”
“It is possible that the passing of the holiday will bring liquidity back in to the system.”
“Without additional liquidity or a big pullback in the USD next week, the 6.2450 level in USDCNH should be tough to break on the downside.”
Key Quotes
“USDCNH has continued to track moves in the DXY fairly closely, so until Wednesday, any significant moves in the value of DXY related to Greece will have at least a modest impact on USDCNH.”
“We would expect 6.2875/6.2900 resistance to be challenged quickly if there is no resolution to the Greek situation by Wednesday and the HSBC Manufacturing PMI due for release on the same day comes in below the 49.0 mark.”
“The move up in USDCNH from the 6.2400/6.2500 area early last week was in part driven by liquidity. PBoC supplied some additional liquidity in February to tide the banking system over through the New Year period, but not enough to force the 7 -day repo rate back below its 30-day moving average (4.2%).”
“It is possible that the passing of the holiday will bring liquidity back in to the system.”
“Without additional liquidity or a big pullback in the USD next week, the 6.2450 level in USDCNH should be tough to break on the downside.”