Watch out for the early February high around 7.0256
The risk-off mood in the market is pushing the yuan lower on the day – part of the reason weighing on the aussie and kiwi – as USD/CNY now rises back above 7.0000.
Looking at the chart, we are moving closer to being just one hiccup away from breaking the 3 February high at 7.0256 and if the yuan does fall further in the coming days/weeks towards 7.0500 or higher, that could well set off another leg of risk aversion.
It is likely that we will have to see Wall Street answer the question of whether or not the risk-off tilt today is going to be bought up again. But with Apple being the root cause, perhaps it could lead investors to be less confident about buying the dip.