USDCNH rebounds from six-week low on downbeat China data, Covid woes – by anilpanchal7 USDCNY RiskAppetite Macroeconomics Coronavirus CentralBanks
ly to have weighed the offshore Chinese Yuan is the market’s dicey mood and mixed comments from the US Federal Reserve officials.
That said, China’s Retail Sales marked the lowest print in five months, to -0.5% YoY versus 1.0% expected and 2.5% prior, whereas the Industrial Production also dropped to 5.0% growth versus 5.2% market forecasts and 6.3% previous readings during October.Elsewhere, the recently firmer Covid numbers from the dragon nation also propel the USDCNH price as Guangzhou reports 5,124 new local Covid-19 cases as of 00:00 November 15, 2022.
On the other hand, an absence of positive headlines from the first face-to-face meeting between US President Joe Biden and his Chinese counterpart Xi Jinping weighs on the market sentiment and favors the pair buyers. Furthermore, the latest commentary from the US Federal Reserve officials renews inflation fears and underpins the USDCNH upside. Recently, the Fed’s Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, Michael Barr mentioned that the inflation is too high. Before that, Vice-Chair Lael Brainard favored a 50 bps rate hike but also stated, “We have additional work to do.” Earlier on Monday, Federal Reserve Governor Christopher Waller also promoted the ideal of a 0.
While portraying the mood, S&P 500 Futures print mild gains but the US 10-year Treasury yields grind higher around 3.87%, which in turn underpinsLooking forward, the risk catalysts are likely to direct the short-term USDCNH moves. However, major attention will be given to the US Producer Price Index for October, expected at 8.3% YoY versus 8.5% prior, as well as the USDespite the latest pullback, the 100-DMA hurdle surrounding 7.1455-60 challenges USDCNH bulls.
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