AUD, CNH on top as PBOC signal they won't.....>

FOREX: AUD, CNH on top as PBOC signal they won't tolerate CNY freefall

-The PBoC's move to increase the cost of shorting the CNY saw some short-term

relief for CNH, which rallied as much as 0.8% against the USD (and dragged the

AUD with it). Nonetheless, the policy change wasn't sufficient to press USD/CNH

through yesterday's low, which remains in tact at Cnh6.8158. Asia market's

interpretation will be key, with the policy change not becoming effective until

August 6th.

-Headline change in nonfarm payrolls missed expectations, but underlying labour

market strength was evident in upward revisions to prior month's estimates and

consistently high average hourly earnings. This meant little to the USD, with

the DXY finishing the session in minor negative territory, but still toward the

upper end of the week's range.

-JPY remained strong, pulling back almost 100 pips from the week's lowest levels

against the USD, with USD/JPY bears now eyeing the 50-dma at Y110.72.

-Japanese GDP, UK GDP and Canadian jobs numbers are the highlights of a quiet

calendar week.