USD/CNH eyes 6.8200 on downbeat China Retail Sales, Fed Powell in focus

• USD/CNH sees an upside to near 6.8200 amid the underperformance of China’s economic data.
• The DXY is trading lackluster ahead of Fed Powell’s speech.
• Rising Covid-19 restrictions have impacted China’s growth forecasts.

The USD/CNH pair is juggling in a minor range of 6.8020-6.8120 after a firmer rebound in the Asian session. Downbeat Retail Sales by China’s National Bureau of Statistics (NBS) have weakened the Chinese yuan against the greenback. The yearly Retail Sales have landed at -11.1%, notably lower than the estimates of -6% and the prior figure of -3.5%. A continuous drop in China Retail Sales has raised concerns over the growth prospects in China.

It would be justified to state that tight restrictions in Shanghai and Beijing to curb the spread of Covid-19 have impacted vigorously the growth prospects in China. Apart from the Retail Sales, China’s Industrial Production has also tumbled sharply. The economic data has slipped to -2.9%, lower than the consensus of 0.7% and the previous print of 0.5%.

Meanwhile, comments from China’s NBS state that the economy is expecting a recovery in consumption. While the economy’s exports will continue to face pressures amid a global slowdown.

On the dollar front, the US dollar index (DXY) is expected to carry forward its consolidation in the European session. The DXY is struggling to surpass 104.60 amid the unavailability of any potential trigger that could provide a meaningful direction to the asset. This week, the economic calendar will be light for the greenback bulls. However, the speech from Federal Reserve (Fed) chair Jerome Powell will remain in focus. Investors are expected to find some insights into the likely monetary policy action by the Fed in its June monetary policy.