Positive trade comments from White.......>

CHINA YUAN: Positive trade comments from White House's Kudlow have weighed on

USD/CNH. Kudlow noted that the U.S. and China are down to the short strokes on

their deal. Earlier today, it became apparent that top trade reps from both

countries will hold a phone conversation on Friday.

- The pair has extended yesterday's losses, registered despite a round of soft

Chinese activity data, including a record low fixed-asset investment print. Some

analysts pointed to better Chinese bond yields, probably reflecting the

perception that the authorities are unlikely to loosen monetary policy. Soft

data failed to elicit immediate gov't/PBoC response, while options are limited

after last week CPI printed at a 7-year high.

- Meanwhile, Weds saw capital requirements for some infrastructure projects cut,

while CSJ reported today that China may need to provide "marginal" liquidity

adjustment as the latest RRR cut may fail to offset looming tax payments.

- USD/CNH last seen at CNH7.0169, ~120 pips worse off. Bears look for a dip

under the Nov 7 low of CNH6.9527. Bulls need to retake the Nov 13 peak/100-DMA

at CNH7.0374/81 to regain some momentum.