USD/CNH remains steady around 6.8800 despite PBoC maintains status-quo


  • USD/CNH has not shown any major action on PBoC’s steady monetary policy.
  • An expansionary monetary policy was expected to spurt the economic recovery in China.
  • Investors have cheered the UBS-Credit Suisse deal and are supporting risk-sensitive assets.

The USD/CNH pair has not shown a significant move despite the monetary policy announcement by the People’s Bank of China (PBoC). The PBoC has announced an unchanged interest rate policy despite the demand for higher stimulus to spurt the economic recovery. The central bank has kept the one-year and five-year Loan Prime Rate (LPR) steady at 3.65% and 4.30% respectively.

Contrary to the unchanged interest rate decision, the street was anticipating further expansion in the monetary policy stance.

Economist at UOB Group suggests that the PBoC could reduce the Loan Prime Rate (LPR) at its next meeting on March 20. They further added, “With the need for further support measures toward the real economy and for 5Y loan prime rate (LPR) to fall further to boost demand for homes, we see the possibility for the 1Y LPR to fall to 3.55% and 5Y LPR to 4.20% in Mar, following the National People’s Congress (NPC).”

Meanwhile, the US Dollar Index (DXY) is facing barricades in attempting a recovery as the expectations of a less-hawkish monetary policy announcement by the Federal Reserve (Fed) are accelerating. As per the CME Fedwatch tool, more than 77% odds are in favor of a 25 basis point (bps) interest rate hike on Wednesday. An interest rate decision of 25 bps would push interest rates to 4.75-5.00%.

S&P500 futures are reviving firmly as investors have cheered the rescue plan for Credit Suisse. UBS Group has agreed to buy Credit Suisse. Sky News reported that under the takeover UBS will pay 3bn Swiss francs (£2.6bn) to acquire Credit Suisse. And, it has agreed to assume up to 5bn francs (£4.4bn) in losses, and 100bn Swiss francs (£88.5bn) in liquidity assistance will be available to both banks.

USD/CNH

Overview
Today last price 6.8814
Today Daily Change -0.0060
Today Daily Change % -0.09
Today daily open 6.8874
 
Trends
Daily SMA20 6.9199
Daily SMA50 6.8379
Daily SMA100 6.952
Daily SMA200 6.9284
 
Levels
Previous Daily High 6.9012
Previous Daily Low 6.8582
Previous Weekly High 6.9394
Previous Weekly Low 6.8316
Previous Monthly High 6.9898
Previous Monthly Low 6.7056
Daily Fibonacci 38.2% 6.8747
Daily Fibonacci 61.8% 6.8848
Daily Pivot Point S1 6.8634
Daily Pivot Point S2 6.8393
Daily Pivot Point S3 6.8204
Daily Pivot Point R1 6.9064
Daily Pivot Point R2 6.9253
Daily Pivot Point R3 6.9494

 

 

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD fluctuates near 1.0750 as markets turn subdued

EUR/USD fluctuates near 1.0750 as markets turn subdued

EUR/USD continues to trade in a relatively tight channel at around 1.0750 in the American session on Wednesday. The pair struggles to finding direction with US markets remaining closed in observance of the Juneteenth Holiday.

EUR/USD News

GBP/USD stabilizes above 1.2700 after UK inflation data

GBP/USD stabilizes above 1.2700 after UK inflation data

GBP/USD clings to modest daily gains above 1.2700 on Wednesday. The data from the UK showed that annual inflation, as measured by the change in the Consumer Price Index, declined to 2% in May from 2.3% in April. The BoE will announce policy decisions on Thursday.

GBP/USD News

Gold extends sideways grind at around $2,330

Gold extends sideways grind at around $2,330

Gold (XAU/USD) struggles to capitalize on the previous day's bounce from the vicinity of the $2,300 mark and oscillates in a narrow band near $2,330. US bond markets remain closed in observance of the Juneteenth Holiday, limiting the pair's volatility.

Gold News

Polygon MATIC poised for 10% rally as momentum indicators signal strength

Polygon MATIC poised for 10% rally as momentum indicators signal strength

Polygon price formed a bullish divergence on a momentum indicator, signaling a reversal. On-chain data shows MATIC’s capitulation event occurred between June 12 and 18.

Read more

Investors' focus will be on Europe

Investors' focus will be on Europe

In the euro area, the EU commission will reveal against which countries it recommends opening an excessive deficit procedure (EDF) due to breaches of the EU fiscal rules.

Read more

Forex MAJORS

Cryptocurrencies

Signatures