FX traders remain firmly focused on "Yuan Watch." The dollar held strong overnight, pulling USD/JPY back into 156’s, while USDCNH stayed steady around 7.2550, reflecting a market still navigating post-Powell clarity and trade tensions. Beijing’s approach since the election has largely been one of “ smoothing” the Yuan as it eases against the dollar. However, this recent slide in the Yuan merely balances out broader dollar strength, with the trade-weighted CFETS basket for the RMB remaining stable. Despite the chatter about a possible RMB devaluation to counter trade war effects, Beijing shows no signs of pulling that trigger; any such move would likely require more pronounced trade war turbulence to materialize.