USD/CNH Back Above 7.1800, After Better US Data/Local Growth Concerns

USD/CNH is holding above 7.1800 in early Friday dealings, just under late Thursday highs from US trade. CNH lost 0.45% for Thursday's session, as broader USD sentiment rebounded post better than expected retail sales and initial jobless claims data. USD/CNY spot finished up just shy of 7.1750 (also a yuan loss of close to 0.50%).

• The CNY CFETS tracker sits at fresh lows back to January of this year (ending yesterday's session at 98.38).
• Broader China growth sentiment remains bearish in the wake of yesterday's July activity figure updates. More policy support is needed to aid the demand-side recovery.
• We also heard from PBoC Governor Pan late yesterday. He stated aggressive policy shifts in either direction were unlikely. This suggests large scale stimulus is unlikely, although market expectations on this front have been low for sometime. Pan also stated the central bank would move away from quantitative targets and more towards price based targets, like interest rates.
• For USD/CNH further upside momentum could bring 7.1945, the Aug 7 high into play. this week's lows rest at 7.1309.
• In the cross asset space, equity sentiment was better yesterday, the CSI 300 closing up nearly 1%. Onshore bond yields sit off earlier highs from this week, although the 10yr yield is holding close to 2.20%. The local data calendar is quiet today.