USDCNH resumed its fall following the....>

CHINA YUAN: USDCNH resumed its fall following the stronger PBOC fix, briefly

dropping back below 6.91, but this level has since been recovered, with the pair

last trading at 6.9180. Fresh comments by Trump that President Xi 'wants to make

a fair deal' are likely also weighing on the pair as it comes up against

trendline support form the Sep 21 lows as well as the key 55-dma at 6.8847. 

- 2-year interest rate swaps are off their highs but still up 3bps on the day at

2.86%, which has helped to narrow US-China rate spreads, currently at 19.1bps

having fallen 5bps from Wednesday's highs. 

- The recovery in the Chinese stock market also appears to have legs with the

CSI300 challenging the key 3300 level, above which would make a bullish reversal

likely, providing support to the yuan.