USD/CNH crosses 6.7150 as PBOC keeps interest rates unchanged at 3.7%
FXStreet · 20 Jun 2022 484 Views
  • USD/CNG has overstepped 6.7150 as PBOC sounded neutral on interest rates.
  • The one-year PLR and five-year PLR have left unchanged at 3.7% and 4.45% respectively.
  • The Fed may announce one more 75 bps rate hike in July.

The USD/CNH pair has scaled above 6.7100 after the People’s Bank of China (PBOC) kept a neutral stance on the interest rates. An accommodative monetary policy stance from the PBOC was highly expected by the market participants as the recent curbs in Shanghai and Beijing to contain the spread of the Covid-19 have dented the aggregate demand prospects.

The PBOC has kept its one-year Prime Lending Rate (PLR) at 3.7%, while the five-year PLR has been stable at 4.45%. The Chinese economy is reviving from the lockdown measures levied for a period of two months earlier. A stable inflation rate at 2.1% and higher Retail Sales at -6.7%, significantly higher than the prior print of -11.1% have supported the PBOC to sound neutral on its interest rates. The PBOC will flush more liquidity into the economy to spurt the growth rate going ahead.

Meanwhile, the US dollar index (DXY) is attempting to take support around 104.65 as odds of a rate hike by 75 basis points (bps) are galloping strongly. The US inflation is stable at above 8% despite two rate hikes in March and May but no material impact was noticed on the asset. Therefore, a 75 basis point (bps) interest rate hike has been announced by Federal Reserve (Fed) chair Jerome Powell. Only one Fed policymaker didn’t support the 75 bps rate hike announcement. Now, investors are bracing for a consecutive 75 bps rate hike in July.

USD/CNH

Overview
Today last price 6.7114
Today Daily Change 0.0024
Today Daily Change % 0.04
Today daily open 6.709
Trends
Daily SMA20 6.6971
Daily SMA50 6.643
Daily SMA100 6.498
Daily SMA200 6.4474
Levels
Previous Daily High 6.7256
Previous Daily Low 6.6848
Previous Weekly High 6.7856
Previous Weekly Low 6.6668
Previous Monthly High 6.8384
Previous Monthly Low 6.6116
Daily Fibonacci 38.2% 6.7101
Daily Fibonacci 61.8% 6.7004
Daily Pivot Point S1 6.6874
Daily Pivot Point S2 6.6657
Daily Pivot Point S3 6.6466
Daily Pivot Point R1 6.7282
Daily Pivot Point R2 6.7473
Daily Pivot Point R3 6.769

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