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CNH Continues to Weaken on US Arms Sanctions

CHINA FX

CNH weakness persists into US hours, with USD/CNH hitting new session highs at 6.7042, extending the bounce for USD/CNH from last week's multi-month low of 6.6278.


  • Early weakness coincided with reports that China are to sanction US aerospace firms including Boeing, Raytheon and Lockheed Martin in response to the sale of $1.8bln worth of arms to Taiwan. The US State Dept approved the sales last week.
  • A spokesperson for China's Foreign Ministry stated the sales interfere with China's internal affairs and will have a "major impact" on US-China relations.
  • 6.7112 could provide some modest resistance going forward, but a break above opens downtrendline resistance drawn off May high at 6.7753.

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