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USD/CNH Trims Losses After A Post-Fix Dip

CHINA YUAN

USD/CNH slipped after a failure to take out CNH7.0 and a stronger
than expected PBoC fix (central USD/CNY mid-point at CNY6.9902 vs.
BBG estimate of CNY6.9943), but has already ticked away from lows, as
the USD trades on a firmer footing. Spot USD/CNH last trades -15 pips
at CNH6.9978.

  • The Global Times ran a couple of op-eds re: China's tensions with the U.S.
    and Australia, marking another round of combative rhetoric from
    Beijing-controlled media vs. those countries, as geopolitics continue to
    draw attention.
  • Bears need a fall through Jul 28 low of CNH6.9864 before targeting Jul
    22 low of CNH6.9643, a key near-term support. Bulls need a firm push
    through CNH7.0 & Jul 28 high of CNH7.0120 to shift focus to Jul 24
    high/200-DMA at CNH7.0302/38.
  • Focus turns to Friday's official Chinese PMI readings for Jul.

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