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Despite the People's Bank of China's monetary policy announcement, the USD/CNH pair has not exhibited a significant movement. (PBoC). The PBoC has announced that its interest rate policy will remain unchanged despite calls for a greater stimulus to stimulate the economic recovery. The central bank has maintained the one-year Loan Prime Rate (LPR) at 3.65% and the five-year LPR at 4.30%.

Contrary to the decision to leave interest rates unchanged, the market anticipated an expansion of the monetary policy stance.

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.

In the meantime, the US Dollar Index (DXY) is unable to recover as expectations of a less hawkish monetary policy announcement from the Federal Reserve (Fed) increase. According to the CME Fedwatch instrument, there is a greater than 77% chance of a 25 basis point (bps) increase in interest rates on Wednesday. An interest rate determination of 25 basis points would drive rates to 4.75 to 5.00 percent.

S&P500 futures are gaining strength as investors applaud Credit Suisse's rescue plan. UBS Group will acquire Credit Suisse. According to Sky News, UBS will pay 3 billion Swiss francs (£2.6 billion) to acquire Credit Suisse. In addition, it has consented to absorb up to 5 billion Swiss francs (£4.4 billion) in liabilities, and both banks will have access to 100 billion Swiss francs (£88.5 billion) in liquidity assistance.

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