USD/CNH has shed ~150 pips and last......>

CHINA YUAN: USD/CNH has shed ~150 pips and last deals at CNH6.9020.

- Soft local data, in the form of industrial profits, has been ignored.

- Focus has fallen on weekend comments from Guo Shuqing, head of China's banking

and insurance regulator, who noted that "those who speculate and short the yuan

in the long run will suffer huge losses given China's growth potential, even as

short-term volatilities are normal."

- A slightly firmer than expected CNY fix i.e. fix < estimate, has also leant

support to the yuan.

- Elsewhere, Friday saw Chinese Premier Li stress that the country will properly

implement larger-scale tax cuts and fee reductions. Li also tipped his hat to

"complex and grave" conditions that China faces, pointing the figure at external

challenges.

- Bears look for a break and consolidation below CNH6.9000, before shifting

their focus lower. Rejection at this level would keep bulls' focus on the month

to date highs.