USD/CNH has ebbed lower and last sits....>

CHINA YUAN: USD/CNH has ebbed lower and last sits at CNH6.7340, ~40 pips worse

off. Earlier gains registered on the back of a softer yuan fixing have been more

than erased, on the back of a rally in Chinese equities, with the CSI 300 last

trading ~3.0% higher.

- Risk sentiment likely feeds on yesterday's pledge from Chinese Premier Li to

pursue opening domestic financial markets this year, as well as press reports

suggesting that China has made fresh proposals in trade talks with the U.S.

- All eyes are on Beijing, where U.S. TR Lighthizer and U.S. Tsy Sec Mnuchin are

discussing trade matters with their Chinese counterparts. Chinese VP Liu will

travel to Washington for further talks next week and, according to White House's

economic czar Kudlow, will meet with U.S. President Trump.

- Bears look for consolidation below CNH6.7350, which acted as a technical

support/resistance level several times since late January, before looking for a

return below the down trendline from Dec 24 at CNH6.7030, breached earlier this

month. Conversely, after the pair has moved away from its 50-DMA at CNH6.7391,

bulls need to retake the level before challenging yesterday's peak at CNH6.7500.