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Brushing Against Friday's High Against USD

CNH

Offshore yuan slightly stronger in Asia-Pac trade, USD/CNH dropping towards Friday lows. The pair last changing hands at 0.64430 compared to Friday's low of 6.4418. The PBOC fixed USD/CNY at 6.4479, 8 pip above sell side estimates. The Central Bank drained a net CNY 190bn via OMOs as the pre-Golden Week liquidity additions continue to roll off.

  • In geopolitics barbs continue to be traded over the Taiwan Strait, Taiwan President Tsai the island was facing "unprecedented challenges" and will defend sovereignty. The comments follow Chinese leader Xi's declaration that unification will be achieved.
  • Elsewhere US trade representative Tai held a virtual meeting with China's Vice Premier Liu an both sides acknowledged the importance of bilateral trade and said will follow up the meeting in the near future.
  • Looking ahead, the data highlights this week are trade balance and inflation figures.

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