- USD/CNH fails to keep the previous day’s recovery moves from 7.0565.
- China’s May month inflation figures flashed downbeat outcomes.
- US-China tussle weighs on the trading sentiment ahead of the Fed meeting.
USD/CNH refreshes intraday low to 7.0727, currently around 7.0735, amid the early Wednesday’s Asian trading. The pair seems to pay a little heed to China’s downbeat data as it extends losses after the release. Also likely exerting downside pressure on the quote is the market’s cautious mood ahead of the US Federal Reserve monetary policy meeting.
China’s May month Consumer Price Index (CPI) and Producer Price Index (PPI) extended the previous two-month weakness during May. The readings suggest the headline CPI has dropped from 2.7% forecast to -2.4% YoY whereas the PPI declines further below -3.3% anticipated fall to -3.7% on a yearly basis.
Read: China data dump unimpressive: May CPI +2.4% vs +2.7% YoY, PPI -3.7% vs -3.3 % YoY
Earlier during the day, Reuters came out with the news suggesting Chinese companies’ pause over plans for US listings while citing the Sino-American tension. Also offering the latest clues of the tussle was US Secretary of State Mike Pompeo who alleged Beijing over its action to push the UK towards favors for Huawei. However, the market’s broad trading sentiment remains sluggish ahead of the key US Federal Open Market Committee (FOMC) announcements.
As portraying the risk-tone, the US 10-year Treasury yields take rounds to 0.83% whereas stocks in Asia flash mixed readings by the press time.
Although the US Federal Reserve is not expected to alter its benchmark Fed rate, the quarterly rate projections and economic forecasts, followed by Chairman Jerome Powell’s speech, become the key to watch.
Technical analysis
Considering the pair’s failure to stay strong above 7.0900, it’s further drops to a 100-day SMA level of 7.0580 can’t be ruled out. Though, a 200-day SMA level around 7.0450 might confine the quote’s additional downside.
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