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Sentiment turned sour in the Asia.............>

FOREX: Sentiment turned sour in the Asia afternoon, with participants concerned
with a surprise uptick in U.S. initial jobless claims and awaiting further
developments in Sino-U.S. diplomatic spat. BBG ran headlines confirming that
China asked the U.S. to close its consulate in Chengdu, as touted in earlier
press reports. USD/CNH punched above CNH7.0200, entering the CNH7.0256/96 zone
(Jul 14/8 highs) before the Chengdu headline hit. It eased off highs as China's
decision failed to represent the materialisation of a worst-case scenario. 
- The latest round of risk-off flows cemented JPY outperformance in G10 FX
space. The currency picked up a bid earlier in the session as USD/JPY dived
through a key support, provided by Jul 10 low of Y106.65, amid thinner
liquidity. Japanese markets remain shut for a public holiday. USD/JPY sales
drove a dip in DXY, which plunged to a 22-month low before ticking off there.
- AUD, NZD and CAD lost ground as concerns over Sino-U.S. tensions continued to
linger. GBP remained vulnerable on the back of familiar Brexit jitters.
- Focus moves to UK retail sales, U.S. new home sales and flash PMI readings
from the U.S., UK & EZ.

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