USD/CNH pauses Fed-induced losses near 6.9000 on softer China Caixin Manufacturing PMI – by anilpanchal7 USDCNY PMI Fed RiskAppetite Banks
also appeared positive while ruling out fears of a banking rout. However, a dropping of the lines in the statement suggesting the need for further rate hikes gained major attention and weighed on the US Dollar despite the hawkish move by the Fed.
Not only the Fed but the US data were also impressive but couldn’t please the greenback of late. On Thursday, US ADP Employment Change rose to 296K for April from 142K prior versus 148K market forecast. Additionally, the annual pay growth declined to 13.2% from 14.2%. Further, ISM Services PMI improved to 51.9 in April versus 51.8 market forecasts and 51.2 previous readings. It’s worth noting, however, that the S&P Global Services PMI and Composite PMI for April eased to 53.6 and 53.
It’s worth mentioning, however, that the greenback’s weakness could be linked to the growing banking turmoil in the United States and looming fears of the debt ceiling expiration. Recently, PacWest Bancorp teased an asset sale and propelled the market’s banking woes while the White House statements suggesting debt limit default could cost 8.3 million job losses weigh on the sentiment.
Amid these plays, S&P 500 Futures print mild losses by tracking the Wall Street benchmarks. It should be observed that holidays in Japan restrict bond market moves in Asia. Having witnessed initial reaction to the Fed moves and China data, USD/CNH pair traders should pay attention to the risk catalysts as the latest risk-off mood seem to put a floor under the US Dollar. Additionally important will be the second-tier US data ahead of Friday’sA convergence of the 21-DMA and 50-DMA, near 6.9040-30, restricts immediate downside of the USD/CNH pair. It’s worth noting, however, that the downbeat oscillators keep favoring the sellers.
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