USD/CNY bounces-off five-month lows near 6.9260 post-China CPI miss
- USD/CNY hit five-months lows as US-Iran tensions faded.
- China’s CPI miss calls for more PBOC easing.
- Focus shifts to US data for fresh trading impetus.
USD/CNY opened with a bearish gap and went onto hit fresh five-month lows at 6.9257, as the Asian currency gained on some reprieve on the US-Iran geopolitical crisis. US President Trump said on Wednesday that Iran’s standing down and therefore the US will take no military response but only impose heavy economic sanctions.
Iran, in early hours of Wednesday, fired missiles on the US airbases in Iraq to avenge the US killing of its Quds Commander Soleimani last week.
Chinese Consumer Price Index (YoY): +4.5% (vs +4.7 % exp)
At the press time, the Chinese yuan is retreating from its five-month highs against the greenback, as downbeat Chinese inflation data continues to weigh. Softening price pressure in China calls for more PBOC easing, in an attempt to boost inflation and growth. USD/CNY recovers to 6.9301, still down 0.21% on the day.
Meanwhile, the spot also ignored the firmer Yuan fix by the Chinese central bank, as risk-on trades outweighed and weighed negatively on the dollar demand across the board. The US dollar index stalls its recent bullish momentum and consolidates near 97.30 region.
Attention now turns towards the US macro data and the US-China phase one trade deal signing due next week for further trading incentives on the pair. In the meantime, the risk trends amid looming Mid-East tensions will continue to have a significant bearing on the prices.
USD/CNY levels to consider