Macro Strategy Nugget: Why USDCNH > or < 7.30 is everything you need to watch
In our “Nugget series” we aim at visualizing the most important themes in global macro with a few timely charts and very few words.
This nugget will show why USDCNH is the by far most important global bellwether at this stage and why 7.20 (or 7.30) will serve as the most important level to watch in global macro.
Let’s look at 3 charts why USDCNH is a very binary predictor of risk assets
USDCNY has served as a risk asset barometer around key intervention levels. Reversals from 7.20 or 7.30 have led to a material surge in risk assets. The key level to watch in this cycle is probably 7.30 again and the authorities are struggling to hold the line this morning.
Chart 1: USDCNY versus S&P 500