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USD/CNH strengthened past CNH7.1500......>

CHINA YUAN
CHINA YUAN: USD/CNH strengthened past CNH7.1500 and topped out 61 pips further
above early on as participants digested weekend news flow, including headlines
about escalating U.S.-China tensions. The Trump/Pompeo duo intensified sabre
rattling around the origins of the coronavirus pandemic, prompting a pushback
from Chinese state media. The POTUS also revisited the question of phase-one
trade deal with China, threatening to terminate the agreement if Beijing fails
to comply with its obligations re: purchases of U.S. goods. That being said, the
rate struggled to establish itself above CNH7.1500 and pulled back towards
neutral levels, with U.S. equity index futures ticking off lows. The rate last
sits +16 pips at CNH7.1366. As a reminder, China is off for holidays.
- Bulls look for a resumption of topside momentum. Gains above Mar 19/Oct 10
highs of CNH7.1653/84 would be an important bullish development. Bears would
like to see a pullback under the 50-DMA/Apr 30 trough at CNH7.0578/27. A
clearance of the level would open up Apr 10 low of CNH7.0370.
- China's trade balance as well as Caixin Services & Composite PMIs come out on
Thursday, with flash Q1 BoP current account balance due Friday.

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