In response to trade war escalation, Chinese Yuan and stocks tumble sharply at open today. USD/CNH (offshore Yuan) hit new high at 7.1832 before retreating mildly. China Shanghai SSE hit as low as 2849.24 and is currently down -0.95%. Hong Kong HSI suffers steep selloff and hit as low as 25249.51, and it’s currently down -2.79%. Some recoveries are seen on news that the National Reform and Development Commission (NDRC) will “reasonably expand effective investment” by lowering the requirement of the minimum capital ratio for some infrastructure projects.
USD/CNH’s up trend from 6.2359 is in progress. As long as 6.9909 support holds, further rise should be seen to 100% projection of 6.2359 to 6.9804 from 6.6704 at 7.4149 in medium term next.