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Morgan Stanley issue new CNH trade.........>

CHINA FX
CHINA FX: Morgan Stanley issue new CNH trade recommendation: Short USD/CNH at
market targeting 6.95 with a stop loss at 7.21.
- MS believe the market has underestimated the news that China has exempted
soybeans from tariffs last Friday and the stepping up of purchases could ease
trade tensions further.
- MS don't believe the CNY has fully priced improving trade talks. "In the past
two episodes of CNY weakness in June 2018 and May 2019, the CNY depreciated by
6% and 3.5% versus the basket, respectively. In August, the CNY did depreciate
by 3.7% on the back of tariff news. It has only retraced a third of the move in
September, despite recent news that shows de-escalation from both sides."
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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