The yuan has begun to outperform its.....>

CHINA YUAN: The yuan has begun to outperform its regional peers over the past

week even as the dollar has weakened against the majors. The yuan seems to be

relatively insulated for now against the resumption of risk aversion, and is

finding some support from the stronger euro. 

- In contrast, the won has continued to weaken in line with risk assets, with

the bearish reversal in KRWJPY likely weighing on the pair.   

- This has seen CNHKRW mount a strong recovery from its multi-year lows and a

close back above down trendline resistance which comes in at 164.00 would

suggest a bottoming pattern.

- That said, with China-Korea interest rate swaps still gradually moving in

Korea's favour, it would likely take a continued decline in general risk

aversion to sustain a rally in the pair.