USD/CNH stays pressured near $6.3600 as China news join continuation of Ukraine-Russia talks
- USD/CNH prints three-day downtrend amid sluggish Asian session.
- China reports lower daily infections for the second consecutive day, Vice Premier He’s comments also favor bears.
- Fed matched wide forecasts of 0.25% but dot-plot and Chairman Powell’s speech were confusing factors.
- Risk catalysts are the key, second-tier US data may entertain traders.
USD/CNH remains on the back foot for the third consecutive day, following its reversal from a five-month high and the 200-DMA. That said, the quote prints mild losses around 6.3600 level during Thursday’s Asian session.
The offshore Chinese yuan (CNH) currency pair takes clues from the hopes of market-friendly measures from Beijing, as well as easing COVID-19 fears.
On Wednesday, China Vice Premier Liu He pushed for the measures to boost the economy in the first quarter (Q1). His comments offered notable upside push to the domestic markets and offered strength to the commodities, as well as Antipodeans.
Additionally, China reported a second day of easy covid numbers after refreshing the record numbers during the weekend. “China reports 1,317 confirmed COVID cases on March 16 versus 1,952 a day earlier,” per Reuters.
Elsewhere, Kyiv’s rejection of proposed neutrality in the 15-point peace plan and the International Court of Justice’s order to Russia to suspend the Ukraine invasion test sentiment but the continuation of talks and recently easy tone of Moscow keeps markets hopeful.
It’s worth noting that the Fed’s rate hike and hawkish dot-plot joins uncertainty over the Russia-Ukraine peace to challenge the pair seller of late.
Amid these plays, stocks in China and Japan lead Asia-Pacific bulls whereas the US 10-year Treasury yields decline 3.5 basis points (bps) to 2.15% while reversing from the highest levels since May 2019.
Looking forward, USD/CNH traders will pay attention to the risk catalysts for fresh impulse while second-tier US data relating to housing, jobs and manufacturing may entertain traders as well.
Technical analysis
A clear U-turn from the 200-DMA, around 6.4115 at the latest, directs USD/CNH bears towards January’s low surrounding 6.3235. However, the 50-DMA may offer an immediate rest-point to the sellers around 6.3480.