China’s central bank PBoC rolled over CNY 700B maturing medium-term loans today. Rate was kept at 2.95%, unchanged for the fourth straight month. The injection was well above the two set batches of MLF that are set to expire in August, totalling CNY 500B. Markets are expecting no change to the benchmark loan prime rate on Thursday.
USD/CNH is mildly softer in range today, mildly due to Dollar’s movements. It’s staying in near term falling channel. Further fall is expected as long as 6.9804 support turned resistance. USD/CNH would target 6.8452 support. But we’d expect strong support around there to complete the three-wave consolidation pattern from 7.1953.