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(ATF) – The S&P500 closed 23% above its March low on Wednesday, defining a new bull market; Asian and European stocks took their cue from that on Thursday and moved higher with oil.

The forex result in Asian trading was a lower dollar, with the DXY dropping below 100 by early evening HK time (99.9180 at 6:15pm).

As US futures fluctuate, we will need to await the US open to see more decisive forex action. The DXY range, compared with recent bouts of volatility, was narrow, ranging between 100.2930 and 99.9180.

With a flaccid dollar, there wasn’t much reason for a lively yuan, either. The People’s Bank of China (PBoC) set parity at 7.0536, barely changed from Wednesday, and CNY was trading at 7.0588 7pm HK time.

A steady yuan, of course, soothes the nerves of foreign bond investors in local Chinese bonds as hedging costs fall well below recent, more turbulent, weeks.

Do we stay in narrow CNY ranges? From the Chinese standpoint, there’s no reason not to.

The PBoC will likely ease monetary policy further in the course of April. But as that supports economic recovery and underpins the back-to-work move of the Chinese labor force, lower rates will not engender significant downward moves by the Chinese currency.

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