USD/CNH Grinds Higher On Greenback Appreciation

Spot USD/CNH has climbed in Asia-Pac hours in what seems like a function of a parallel move in the DXY. The PBoC fix was only marginally weaker than estimated and thus provided no evident impetus, while Sino-U.S. tensions have continued to bubble, albeit without any major surprises.

• In his latest round of sabre-rattling, U.S. President Trump warned that he plans to backpedal on his country's economic relationship with China and threatened to punish companies that create jobs in China and elsewhere.
• The NYT ran a source report noting that the White House is considering a ban on cotton products from the Chinese province of Xinjiang over human rights concerns. The decision could be announced as soon as today.
• China's geopolitical tensions with its neighbours also continue to flare. The People's Liberation Army accused the Indian military of crossing the Himalayan border, which constitutes a "serious military provocation". Elsewhere, Taiwan's President Tsai spoke at an event with an ex-U.S. National Security Adviser, noting that the island has boosted defence spending in line with the threat it faces.
• China's President Xi delivers an address on Covid-19 fighting; little of note there so far.
• USD/CNH trades +50 pips at CNH6.8375 at typing, off the session high of CNH6.8393. Bulls look for a clean break above CNH6.8500, which kept a lid on gains on the last two days of last week. A break here would open up Aug 27 high of CNH6.8937. On the flip side, a fall through Sep 1 low of CNH6.8134 would signal the resumption of a broader downtrend, opening up the lower 3.0% Bollinger band at CNH6.7655.
• China's inflation data, coming up on Wednesday, headlines the local docket this week.