English
USD/CNH Fluctuates Around 6.9000 As Attention Shifts To PBoC Policy
The USD/CNH exchange rate fluctuates around 6.9000 as investors await fresh impetus from PBoC policy. The PBoC is anticipated to take a dovish posture on the LPR as the economy seeks a recovery. Due to investors' skepticism regarding the impending Fed's policy, the USD Index has lost some of its appeal.
During the Asian session, the USD/CNH has continued to trade in a range near 6.9000. Investors are awaiting Monday's scheduled interest rate decision by the People's Bank of China (PBOC) before taking any action on the major.
After a robust recovery on Thursday, S&P500 futures are showing minimal losses in the Asian session, indicating an improvement in the risk appetite of market participants. The US Dollar Index (DXY) has broken out of the narrow consolidation range between 104.30 and 104.60. The appeal for the USD Index has trimmed as investors are dubious about the forthcoming monetary policy by the Federal Reserve (Fed) after a decline in the United States inflation and broadening banking turmoil.
After a confident recovery in 500-US stock basket futures, sluggish demand for US government bonds has boosted returns on the same. The 10-year US Treasury yields have exceeded 3.59 percent.
Going forward, the emphasis will be on the publication of the PBoC's monetary policy decision. UOB Group economists speculate that the PBoC may reduce the Loan Prime Rate (LPR) at its March 20 meeting. Following the National People's Congress (NPC), the 1Y loan prime rate (LPR) could fall to 3.55 percent and the 5Y loan prime rate (LPR) could fall to 4.20 percent. This is due to the need for additional real-economy support measures and the desire to increase housing demand.
Moreover, an upward revision of China's Gross Domestic Product (GDP) projections would strengthen the Chinese Yuan. Goldman Sachs has revised its GDP projections for China for the year 2023 from 5.5% to 6.0%.
Bonus rebate to help investors grow in the trading world!
