FX Strategists at UOB Group now see USD/CNH returning to the previous consolidative stance, likely within the 6.4400-6.5000 range.
Key Quotes
24-hour view: “The sharp and rapid drop in USD to 6.4563 came as a surprise (we were expecting USD to trade sideways). The decline appears to be overdone and USD is unlikely to weaken much further. For today, USD is more likely to trade between 6.4500 and 6.4750.”
Next 1-3 weeks: “While we noted yesterday (29 Jul, spot at 6.4900) that ‘the prospect for USD to move to 6.5500 has diminished’ we did not anticipate the subsequent sharp sell-off to 6.4563. The break of our ‘strong support’ at 6.4820 indicates that the build-up in momentum (when USD soared to 6.5289 on Wednesday) fizzled out quickly. The sharp but short-lived swings have resulted in a mixed outlook and USD could trade within a 6.4400/6.5000 range for now.”
