USD/CNY expected to trade between 7.10/7.20 next week  – MUFG

Analysts at MUFG Bank, see the USD/CNY pair with a neutral bias for next week and expect the pair to move in the 7.1000-0.72000. 

Key Quotes:

“News that the top China/US trade negotiators will resume talks in early October put a few pieces in place for a relief rally we penciled in in the September monthly. Chances are now good for some noticeable Chinese purchases of US agriculture goods to please Trump. And working-level preparatory talks in mid-September could always be spun positively. But it’s a long month and obstacles to a Real Deal remain substantial.”

“Assuming no further tariff piques (reports this week said Trump wanted to double tariffs – ie, from 25% to 50% - but was talked out of it), we have a meeting, a ceasefire but with the main event punted into next month. China wants to cut interest rates in mid-September but will probably wait first for the Fed on 18 September. We're not convinced Chinese CPI inflation will slow.”