USD/CNH bounces back from 7.3300 despite Caixin Manufacturing PMI improvement | So Good News

• USD/CNH has seen a V-shape reversal around 7.3300.
• Caixin Manufacturing PMI came in at 49.2 versus expectations of 49.0.
• The Fed is set to raise rates by 75 bps, with inflationary pressures still unabated.

The USD/CNH pair is showing a V-shape reversal after falling near 7.3300 in the Tokyo session. Assets saw a recovery despite the bullish release of Caixin Manufacturing PMI data. Economic data edged higher with estimates of 49.2 and 49.0 and a prior release of 48.1.

In the beginning, China’s official manufacturing PMI came in at 49.2, down from estimates of 50.0 and a prior release of 50.1, the National Bureau of Statistics (NBS) said. In addition, The non-manufacturing PMI came in sharply lower at 48.7, compared with expectations of 51.9 and the previous release of 50.6.

Meanwhile, The U.S. dollar index ( DXY ) fell sharply in Tokyo as risk appetite returned strongly. DXY fell sharply to near 111.36. S&P500 futures rebounded strongly after falling on Monday amid overall optimism in the quarterly results season.

Federal Reserve (Fed) bets fell as yields on U.S. government bonds surged. At the time of writing, 10-year US Treasury yields fell to 4.04%, down 0.90%.

The main factor this week will be the Fed’s interest rate decision. The US Federal Reserve is expected to raise interest rates for a fourth time by 75 basis points (bps) as inflationary pressures show no sign of abating. However, Consumer spending may weigh on the rate of inflation; This was reduced to 1.4% from the previous expansion of 2.0%.