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Yuan Strengthens As Risk Supported

CNH

Offshore yuan is stronger on Monday, USD/CNH falling back below 6.50 after rising from around 6.45 at the start of August and peaking at 6.5002 last week; on an standalone alone basis the China CFETS RMB index has hit the highest since 2016. USD/CNH last down 58 pips at 6.4944. Risk sentiment is positive in Asia which has helped support yuan, equity markets in the region are higher with the CSI 300 currently up over 1.2%. On the coronavirus front China reported no new cases for the first time in over a month. China stepped up testing to isolate breakouts and utilized sweeping quarantines to isolate infections. Elsewhere, data on Friday showed the ratio of FX settlement by bank customers to foreign-related FX receipts was at 69.1%, down by 1.7ppts from a month ago.

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