BALANCE: China Eases Capital Controls As Dollar Weakens.

This first easing of capital flight measures comes as “China’s leaders and financial markets feel more confident that pressure on the yuan and the country’s foreign exchange reserves has diminished, thanks largely to a pullback in the surging U.S. dollar.” It also comes at a time when increasingly more Chinese companies have complained they are unable to consummate offshore M&A due to the PBOC’s limit on how much capital they can park offshore.

In March the U.S. owner of Dick Clark Productions Inc said that one of its affiliates terminated an agreement to sell assets to Chinese conglomerate Dalian Wanda Group, with Reuters reporting earlier the deal was under pressure amid tight scrutiny by Beijing on outbound deals.

Facilitating Beijing’s decision has been the steep drop in the US Dollar in 2017. As a reminder, the yuan slumped around 6.5% against the USD last year, but has since firmed nearly 1% in 2017, defying many analysts’ expectations of further depreciation, and benefiting from Trump’s recent attempt to talk down the dollar, no matter how hard Mnuchin may try to deny it. Suggesting that Yuan appreciation may just be getting started, a Reuters poll earlier this month indicated investors likely increased their bullish bets on the yuan to the most since July 2015.

China had reportedly dug deep into its multi-trillion dollar foreign reserves to keep the yuan propped up.