VIEW: Goldman Sachs note that............>

CHINA YUAN: VIEW: Goldman Sachs note that "uncertainty around US policy re:

China generated more vol. in CNY over the past week. In his press conference

Friday, Pres. Trump announced a range of measures in response to recent Chinese

actions, including the passage of a new security law for Hong Kong at the recent

NPC. The specific policies were relatively narrow in scope, and we would not

consider the steps a meaningful escalation. However, disputes between the two

countries now cover a range of issues which seem unlikely to be resolved soon,

we exp. legislation related to the delisting of Chinese firms to become law.

Moreover, over the last month the PBOC has demonstrated some tolerance for

gradual CNY depreciation, in our view; before the last week, the CNY

countercyclical factor had been relatively small. As result, we exp. ongoing

capital outflow pressures to weigh on CNY, and are revising our USD/CNY

forecasts higher: to 7.25/7.15/7.00 for 3m/6m/12m horizons respectively, vs.

7.15/7.05/6.90 prev. At the same time, we do not exp. recent bilateral tensions

to escalate to '19 levels, with spillovers to mkts well beyond NJA FX - but this

remains a source of uncertainty for broad USD & a number of specific crosses."