USD/CNH rebounds from 7.3300 despite an upbeat Caixin Manufacturing PMI
|- USD/CNH has witnessed a V-shape reversal at around 7.3300.
- Caixin Manufacturing PMI has landed higher at 49.2 vs. the expectations of 49.0.
- The Fed is set to hike rates by 75 bps as inflationary pressures have not slowed down yet.
The USD/CNH pair has displayed a V-shape reversal after dropping to near 7.3300 in the Tokyo session. The asset has witnessed recovery despite the release of upbeat Caixin Manufacturing PMI data. The economic data has landed higher at 49.2 vs. the projections of 49.0 and the prior release of 48.1.
Earlier, China’s official Manufacturing PMI landed lower at 49.2 vs. the projections of 50.0 and the prior release of 50.1, reported by the National Bureau of Statistics (NBS). Also, the Non-Manufacturing PMI had been recorded significantly lower at 48.7 against the expectations of 51.9 and the former release of 50.6.
Meanwhile, the US dollar index (DXY) has slipped sharply in Tokyo as the risk-on impulse has rebounded firmly. The DXY has dropped sharply to near 111.36. The S&P500 futures have rebound strongly after a bearish Monday amid overall optimism in the quarterly result season.
The returns on US government bonds have fallen despite accelerating hawkish Federal Reserve (Fed) bets. The 10-year US Treasury yields have dropped to 4.04%, 0.90%, below its previous close, at the time of writing.
This week, the major trigger will be the interest rate decision by the Fed. The US central bank is expected to hike the interest rates by 75 basis points (bps) for the fourth time as the inflationary pressures have not displayed signs of exhaustion yet. However, consumer spending has trimmed in the third quarter to 1.4% from the prior expansion of 2.0%, which may weigh on the inflation rate.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.