Ella 
The USD/CNH exchange rate was flat around 7.2650 in early European trading on Tuesday. The onshore RMB rebounded from a seven-month low as major Chinese state-owned banks conducted foreign exchange intervention in response to the strengthening of the US dollar.
The US dollar rose in the previous trading days, supported by unexpectedly strong US employment data last week, which led to higher US Treasury yields. The Chicago Mercantile Exchange’s FedWatch tool showed that traders have reduced the probability of the Federal Reserve cutting interest rates in September from 68% before the release of non-farm payrolls to nearly 47%. US non-farm payrolls in May climbed to 272,000 from 165,000 in April (revised to 175,000), higher than the expected value of 185,000.
On Tuesday, Reuters reported that the RMB fell to a near seven-month low against the US dollar on Tuesday, prompting Chinese state-owned banks to sell US dollars for RMB in the onshore spot foreign exchange market on Tuesday.
Investors will pay close attention to the US Consumer Price Index (CPI) data for May, which will be released on Wednesday. Inflation is expected to be 3.4% in May, while core inflation is expected to reach 3.5% in the same period. The Federal Reserve’s monetary policy meeting will be in the spotlight later on Wednesday, and the Fed is expected to remain on hold. After the meeting, the Fed will update the Summary of Economic Projections (SEP). Market participants will pay close attention to the spirit of the meeting. Hawkish comments from Fed officials may further boost the dollar broadly and boost USD/CNH.
