CNH sold as consulate mystery unsettles.......>

FOREX: CNH sold as consulate mystery unsettles markets

- The healthy performance of equities since the beginning of the week partially

reversed early Wednesday as reports circulated that the US are forcing the

closure of the Chinese consulate in Houston, Texas, with the US State Department

citing threats to US intellectual property. The headlines followed mysterious

reports a few hours earlier of papers and documents being burned inside the

premises. Chinese officials have warned against the "unprecedented escalation",

leaving markets wary.

- The response was a sharp rally in USD/CNH, which rose above 7.01 for the first

time in a week, with the greenback now among the strongest in G10 ahead of the

NY crossover. There's been relatively little readthrough for risk proxies,

however, with AUD, NZD still holding firm. GBP is the poorest performer as

markets take profit on the recent rally.

- Canadian CPI and US existing home sales data are the highlights going forward.

ECB's Lagarde is due to speak at a webinar with an appearance by ECB's de

Guindos a few hours afterward.