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A combination of worrying reports on.....>

CHINA YUAN
CHINA YUAN: A combination of worrying reports on coronavirus out of the U.S. & a
weaker than expected PBoC fix has lent support to USD/CNH, inspiring a dynamic
recovery from early session lows. NYT reported that over 2.7k people are under
quarantine in NYC, while Maryland declared a state of emergency. USD/CNH
operates +147 pips at CNH6.9560, slightly off best levels.
- Today's rally has been capped by the 50-DMA at CNH6.9637. A firm push above
this level would open up the 38.2% retracement of the Feb 21 - Mar 4 slide at
CNH6.9709. Meanwhile, bears hope that the bounce of recent lows is a mere
correction & continue to eye Mar 4 trough at CNH6.9176 as their initial target.
- Worth flagging our latest MNI EXCLUSIVE piece re: yuan strength. A Chinese
policy advisor & ex-FX off'l told us that the yuan's recent strength vs. USD
will likely be short-lived as the PBoC prefers to keep the exchange rate within
the 6.9-7.1 range to the greenback.
- Chinese trade balance hits the wires on Saturday, while Tuesday's inflation
data headlines next week's docket.

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