The PBOC has been strengthening Yuan against USD throughout 2020 and that trend is not stopping in the new year, with the latest onshore fix set at 6.4605, a big drop down from yesterday’s 6.4823 as offshore trading (USDCNH) gets below the 6.45 level. The weekly chart shows the strength of this trend with the 2018 lows at 6.25 not that far away:
Meanwhile China has had the biggest jump in daily cases of COVID-19 in over five months. From CNBC:
Local authorities in regions near Beijing are stepping up restrictions on social activity as new coronavirus cases grow.
Langfang city, located about 1.5-hours south of downtown Beijing, told its nearly 5 million residents on Tuesday to stay home for the next seven days. The city is in Hebei, the same province as Shijiazhuang, a city of 11 million people that locked down late last week after a spike in coronavirus cases.
Shijiazhuang reported 39 new confirmed cases for Monday, while Langfang disclosed one. That brought the total number of current confirmed and asymptomatic cases in Hebei province to more than 500 people.Separately, two regions of China’s northernmost province of Heilongjiang announced lockdowns on Tuesday. The province reported one new confirmed case and 36 asymptomatic ones for Monday.
This is going to have a big impact in the first quarter if the lockdowns continue, but Chinese stocks (both mainland and occupied Hong Kong) are treating this new outbreak as benign with new weekly highs on the Shanghai Composite and Hang Seng Index as other Asian bourses struggle to find traction.