USD/CNH rebounded from 6.9100 as Caixin Services PMI misses estimates marginally

The USD/CNH pair has shown a recovery move from 6.9100 amid the release of the downbeat Caixin Services PMI data (April). The economic data has landed at 56.4, marginally lower than the estimates of 56.5 and the former release of 57.8.

This week, the Caixin Manufacturing PMI also failed to stand on expectations. The Caixin Manufacturing PMI was released at 49.5, lower than the estimates of 50.3 and the former release of 50.0. Despite fiscal and monetary support the Chinese economy is struggling to remain on track of progress after dismantling pandemic controls.

This has raised concerns in the minds of investors over the pace of economic recovery in the Chinese economy. The economy is continuously facing pressure from the vulnerable real estate sector and subdued households' demand.

S&P500 futures have added significant gains in the Asian session indicating an improvement in market sentiment. Investors are digesting the US banking jitters and are focusing more on optimism infused by neutral guidance from the Federal Reserve (Fed).

The US Dollar Index (DXY) has corrected to near 101.23 in the Tokyo session. On a broader note, the USD Index is showing signs of volatility contraction ahead of the release of the United States Nonfarm Payrolls (NFP) data. Investors are anticipating a decline in the number of job additions in April, however, upbeat labor market data could fuel the need of additional interest rate hikes by the Fed despite hints of pause that have already been delivered.