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USDCNH remains under upside following....>

CHINA YUAN
CHINA YUAN: USDCNH remains under upside following the fresh high fix for the
yuan at 6.9574. The pair is testing 6.9750, with yesterday's high of 6.9772
marking the last line of defense for bears ahead of a run at 7.0. 
- News that the Trump administration is preparing another round of tariffs
should Trump-Xi talks end with no trade deal - a story later refuted by the
white House - saw the pair temporarily take out its Oct 26 high in early Asian
trading.
- USDCNH continues to track US-China interest rate swap spreads, which trades at
new highs of 25.5bps, after rising 25bps over the past month. Real rate spreads
are likely rising even faster given the drop in US breakevens, suggesting
further fundamental upside pressure on USDCNH towards the key 7.0 level.

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