USD/CNH last trades at CNH6.9308, ~40....>

CHINA YUAN: USD/CNH last trades at CNH6.9308, ~40 pips higher on the day. The

PBoC set its yuan mid-point vs. USD at CNH6.8993, roughly in line with exp.

- The rate dropped 71 pips yesterday, mostly on the back of a weaker USD.

- U.S. Pres Trump said that there still is a "good possibility" of a trade deal

with China and Huawei could be part of it, despite being "very dangerous."

- It is worth looking at the recent CNY fixings vs. USD from the PBoC (see chart

at https://emedia.marketnews.com/CNYFix240519.png). This week's round of fixings

have been tightly clustered, with the mid-point slightly undershooting exp. each

time, which might have had some stabilising impact on the yuan. Also worth

noting that mid-points began consistently missing forecasts two days after the

escalation of Sino-U.S. trade war triggered a rally in USD/CNH on May 6.

- USD/CNH has consolidated in the CNH6.9200-6.9500 range over the last week and

a break above the aforementioned CNH6.9500 boundary would open up the pivotal

CNH7.0000 level. Bears look to the lower end of the recent range, before

challenging CNH6.8867, which represents the 23.6% retracement of the rally from

CNH6.6771 to CNH6.9514.