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  • USD/CNH trims intraday gains around the multi-month low.
  • China Commerce Minister agrees over importance of bilateral trade with the US, supports probe in COVID-19 origins.
  • China Industrial Profits ease in April, US Dollar extends rebound.
  • US Treasury yields weigh on sentiment, Durable Goods Orders, Fedspeak eyed.

USD/CNH extends pullback from the intraday top, up 0.09% on a day around 6.3860, during early Thursday. In doing so, the Chinese currency (CNH) pair fails to keep the corrective pullback from the lowest levels since May 2018, tested the previous day, amid troubled trading and upbeat US dollar, not to forget downbeat China data.

China’s Industrial Profits eased below 92.3% YoY to 57.0% in April, offering the latest blow to the USD/CNH prices.

Also on the negative side could be the US dollar’s run-up and strong Treasury yields that drag the market sentiment of late. That said, the US dollar index extends Wednesday’s recovery moves from early January lows, up 0.13% intraday, while following the firmer 10-year Treasury yields around 1.58%.

While the US Federal Reserve (Fed) official’s success in taming the tapering fears seem to favor the US Treasury yields and the US dollar, chatters over US-China trade talks and the People’s Bank of China’s (PBOC) readiness to let the rate follow market forces probe bears. Elsewhere, US President Joe Biden stays ready to extend infrastructure talks and push for more stimulus even as Republicans are against the moves.

Amid these plays, S&P 500 Futures drop 0.20% intraday and weigh on the Asia-Pacific stocks.

Moving on, chatters relating to the US-China relations and the Fedspeak can entertain USD/CNH bears ahead of today’s US Durable Goods Orders. However, the important data of the week is Friday’s Core Personal Consumption Expenditure (PCE) Price Index for April, the Fed’s preferred inflation gauge.

Read:  US Durable Goods Orders April Preview:  Jobs should equal spending

Technical analysis

Unless closing beyond February lows near 1.4000, USD/CNH remains vulnerable to refresh multi-month low.