USD/CNH marks four-day losing streak as China flashes positive signs after the pandemic
- USD/CNH nears the weekly low, extends losses from the five-month top.
- China resumed construction, Hubei re-start railway operations.
- US dollar weakness persists amid expectations of the COVID-19 bill.
- Hubei registers zero new cases versus 1 on March 23.
While conveying small steps that mark the nation’s recovery from the coronavirus (COVID-19), headlines from China help the national currency. As a result, the USD/CNH pair registers the consecutive fourth day of decline to 7.0660, down 0.30%, during the Asian session on Wednesday.
Not only the news of 90% resumption of major infrastructure projects but efforts to boost car sales and re-start of railways in Hubei, the epicenter of the deadly virus, also contributes to optimism in China.
Furthering the impact could be Hubei’s zero levels of new cases of the disease. It should be noted that the cases in China rise 47 by the end of March 24. However, the dragon nation marks fresh cases as imported.
In the US, fears of the pandemic continue to loom as the New York City Mayor reiterated the calls to avail military’s help to combat the disease even if US President Donald Trump turned down the same earlier in Asia.
Amid all this, the market’s risk-tone remains sluggish with the US 10-year treasury yields marking three basis points (bps) of gains versus the S&P 500 Futures’ 1.0% losses to 2,415 by the press time.
Investors currently await the details of the US COVID-19 Bill that is likely to be passed today in the Senate. If so, the risk-tone could get a further boost while any further delays in the much-awaited aid package could result in fresh risk-off.
Technical Analysis
The February month high near 7.0570 acts as the near-term key support while buyers may take entry beyond December 2019 top surrounding 7.0870.