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The initial risk-on impetus, linked to...>

CHINA YUAN
CHINA YUAN: The initial risk-on impetus, linked to a well covered news re:
Moderna's Covid-19 vaccine trial, allowed USD/CNH to probe the water under the
CNH7.0000 mark. However, the rate failed to hold below there, as participants
were aware of some caveats surrounding Moderna's study, while boiling U.S.-China
tensions remained in focus. The PBoC fix was only marginally stronger than
expected left the redback more or less unfazed. USD/CNH last sits at CNH7.0046,
60 pips worse off on the day.
- China threatened to retaliate after U.S. Pres Trump signed legislation
sanctioning Chinese off'ls responsible for human rights abuses in Hong Kong and
issued an order to end the city's special status. Beijing said it will roll out
sanctions against U.S. individuals & entities, but didn't reveal any details.
- Bears see Jul 9 low of CNH6.9809 as their initial target, a break here would
shift focus to the lower 3.0% Bollinger band at CNH6.9474. Bulls look for a jump
above Jul 14 high of CNH7.0256, before targeting the 200-DMA at CNH7.0386.
- Tomorrow's release of Q2 GDP data and June economic activity indicators out of
China will provide much interest.

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