USD/CNH: Yuan struggles despite dovish Fed
- Offshore Yuan (CNH) is finding no love despite the dovish Fed.
- President Powell mentioned high inflation as a prerequisite for rate hikes.
- Dollar took a beating in the overnight trade.
- Trade concerns are likely keeping investors from buying CNH.
China's offshore Yuan (CNH) is struggling to pick up a bid, despite the dovish Federal Reserve (Fed) and the resulting broad-based losses in the US dollar.
The USD/CNH pair is currently trading largely unchanged on the day at 7.0284, having closed Wednesday on a flat note.
The Fed kept rates steady at 1.5-1.75% and signaled a rate cut pause in 2020 as expected, but President Powell sent the US dollar lower by citing high inflation as a prerequisite for rate hikes.
The sell-off in the greenback powered a bullish breakout in EUR/USD. British Pound and Japanese Yen also eked out gains against the US dollar and are trading on the front foot at press time.
So far, however, the dollar weakness has done little to push USD/CNH lower, as noted earlier.
The Yuan is having a tough time scoring gains, possibly due to fears that Trump administration will go ahead with the planned 15% tariffs on $160 billion in Chinese goods. The hike is scheduled to take effect on Sunday.
Chinese officials expect United States President Donald Trump to delay a threatened tariff increase set for Sunday (Dec 15). However, White House Trade Adviser Peter Navarro on Tuesday said he had no evidence that the tariffs set to take effect on Sunday won't take effect.
Technical levels