PBoC activity has allowed risk appetite to....>

FOREX: PBoC activity has allowed risk appetite to breathe a sigh of relief. The

announcement that CNH30bn worth of bills will be auctioned in Hong Kong coupled

with fixing USD/CNY below both CNY7.0 & the median estimate alleviated the bulk

of earlier pressure on the yuan.

- The Antipodeans have picked up a bid. AUD/USD has returned above the

trendline, which kicks in today at $0.6779. The levels seems to be providing

support, allowing the rate to consolidate at $0.6782, 27 pips better off. The

next target above is provided by the $0.6800 mark.

- NZD/USD halted its move off highs, edging higher again. The rate sits at

$0.6565, 37 pips higher. Psychological resistance provided by $0.6600 remains in

focus.

- JPY has tumbled across the G10 currency board. USD/JPY has returned onto the

Y106.00 handle and last trades at Y106.23, limited to the downside by the lower

Bollinger band (2%). A break above would open Y106.65, which represents the

76.4% retracement of the YtD range.

- Aussie trade balance comes out shortly.