US - China Bilateral Relations continue to suffer

Let's quickly look at the geopolitical narrative that's shaping up and is making much of the headline.

Chinese leader Xi Jinping took a direct aim at the U.S in the recently concluded NPC when he said “Western countries—led by the U.S.—have implemented all-round containment, encirclement and suppression against us, bringing unprecedentedly severe challenges to our country’s development”. This was in sharp contrast to general conduct of avoiding any direct public remarks criticizing U.S. 

On Tuesday, Qin Gang ( earlier Chinese Ambassador to the U.S) said the Biden administration was insincere in saying it wanted to preserve relations and warned the U.S. against engaging in what he called new McCarthyism.

The remarks further exacerbate the strains in the US - China relationship which has already suffered as a result of the Chinese Balloon incident, U.S. Secretary of State Anthony Blinken's accusation pertaining to the possibility of China supplying weapons to Moscow, U.S supplying weapons to Taiwan, U.S clampdown on high tech exports to China. 

Negative US - China headlines are likely going to keep the USDCNH (6.99) supported on the downside. USDCNH strengthened with USDCNH up close to 1% on the day.