To stay further below 7.00 – DBS

USD/CNH should continue its decline below 7.00 after last week’s 0.9% drop to 6.9815. The pair was last seen at 6.9952, notes DBS FX analyst Philip Wee.

Additional fiscal measures are expected

“The CSI 300 Index rose 15.7% last week, its best weekly performance since November 2008, thanks to China’s most significant monetary stimulus package since the Covid-19 pandemic to support the real estate sector and shore up capital markets.”

“Additional fiscal measures are expected as China aims to achieve its 5% growth target. An announcement is likely before the meeting of the National People’s Congress in the second half of October.”

“The U.S. Treasury Department welcomed last week’s stimulus measures, but emphasized the need for greater domestic demand over dependence on exports.”