$/cnh - testing big levels. Keep an eye on gold/commodities for possible reversals.

$/cnh had a quiet breakout today. Thru the 1 month highs and above levels from mid last month when PBOC raised FX reserve requirements for banks. Keep an eye if it moves thru 6.40, should be headwind for commodities, especially gold which also struggling with higher real rates. Can’t forget about the historical correlations here between $/cnh and CRB RIND. We are buying GDX puts.

Chart Source: Bloomberg