USD/CNH has already pared modest.........>

CHINA YUAN: USD/CNH has already pared modest losses registered in reaction to a

BBG source story stating that China is sticking to the September round of trade

talks with the U.S. after yesterday's tariff delay. The full story was less

upbeat than the headline; it mentioned China's willingness to visit Washington

in September, but highlighted that "Chinese negotiators are not very optimistic

of any imminent progress" as concessions are unlikely in the lead-up to the Oct

1 anniversary of the founding of the People's Republic of China.

- USD/CNH last deals at CNH7.0390, ~260 pips better off but shy of overnight

highs. Brief reprieve was brought by a stronger than exp. PBoC fix, but its

impact was negated by very disappointing Chinese economic activity indicators

for July and the dissipation of enthusiasm seen after yesterday's tariff delay.

- Bulls would be pleased by a break above the 38.2% fibo retracement of the Aug

rally at CNH7.0492, which would draw their attention to the CNH7.1000 mark.

Bears look for a dip below the psychological CNH7.0000 level, which would clear

the way to the 21-DMA at CNH6.9630.