USD/CNY has breached above 6.70 mark. The Shanghai lockdown weighs on confidence regarding the economic prospects of China, economists at Commerzbank report.

Weak April trade

China's trade data for April came in roughly in line with market expectations. On one hand, the export growth slowed to small single digit, from 14.7% in the prior month. On the other hand, the import halted growth for two consecutive months, reflecting the soft domestic demand due to the virus restrictions. The overall trade sector is therefore facing strong headwinds.” 

“The Shanghai lockdown implies a further disruption to global supply chains as well as a negative impact on Chinese domestic demand. Clearly, the market is pricing in economic weakness and risk of capital outflows, on the back of continued Shanghai lockdown.”