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USDCNH broke above its Oct 4 high........>

CHINA YUAN
CHINA YUAN: USDCNH broke above its Oct 4 high yesterday as the weakness in the
euro appeared more of a trigger for the move than the the PBOC easing measures
given that the break occurred in European trading after a relatively quiet Asian
session. 
- The pair remains clear of the Oct 4 high which now acts as support at 6.9173,
just below the current spot at 6.9227. 
- Yuan weakness was in line with the widening US-China interest rate swap
spread, which hit a new cyclical high at 17.2bps. It is difficult to see USDCNH
holding below its Aug 15 high at 6.9586 given the trend in yield spreads, with a
Chinese equity market rally likely needed to prevent a bullish break in USDNCH. 

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