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HK autonomy threat dents sentiment - US.......>

FOREX
FOREX: HK autonomy threat dents sentiment
- US Secretary of State Pompeo ratcheted higher the tension with China Wednesday
by formally notifying Congress that Hong Kong should no longer be considered as
autonomous from mainland China. CNH underperformed throughout, with USD/CNH
narrowing the gap with 7.20. A break above here would be the first on record for
the offshore currency and should CNY follow suit, USD/CNY would be sitting at
levels not seen since 2008.
- A general bounce in the USD worked against the rally in most major pairs seen
Tuesday, pressuring GBP/USD back to flat on the week and prompting EUR/USD to
edge back below $1.10. Further weight went through GBP on a pessimistic update
from the UK Brexit minister who further flagged risks to a potential trade deal
ahead of the end-2020 deadline when the transition period concludes. EUR/GBP
rallied well, but resistance ahead of the 0.90 level holds for now.
- Regional German inflation numbers are due Thursday as well as durable goods
orders, personal consumption and weekly jobless claims data. Speakers include
RBA's Lowe, ECB's Villeroy and Fed's Williams & Harker.

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