USD/CNH suffered its second intraday drop.....>

FOREX: USD/CNH suffered its second intraday drop of more than 1% in as many

weeks on Friday as the PBoC resumed the use of the counter-cyclical factor in

the CNY fixing - effectively signalling that the central bank is ready and

willing to shore up the currency should they deem it necessary. As a result,

USD/CNH slipped below CNH6.80 for the first time since July 31st.

- Already suffering from the CNH rally, USD was dented further as Fed Chair

Powell talked down the risks of an overheating economy & inflation overshoot.

- AUD started Friday strong & finished it stronger, with mkts hoping the

appointment of Treasurer Morrison as AU PM will bring an end to the political

uncertainty. AUD was the strongest in the G10, dragging the NZD with it.

- GBP ignored late reports that "the deadline for Britain and the European Union

to agree the terms of Brexit has been pushed back by four weeks amid fears that

Conservative MPs could scupper Theresa May's Chequers deal.

- A thin docket to start the week, with the UK out on holiday Monday & German

IFO headlining. Highlights later this week include U.S. & Canadian GDP, U.S.

PCE, EZ CPI, Official China PMIs & the BoK MonPol decision.