Ella 
USD/CNH fell as China announced plans to take more stimulus measures to offset the weakening effect of Tuesday’s measures. USD/CNH was trading around 7.00 during the European session on Thursday. The People’s Bank of China (PBoC) set the central parity rate of the USD/CNY exchange rate on the previous trading day at 7.0354, while the previous central parity rates were 7.0202 and 7.0367 respectively.
China plans to inject more than 1 trillion yuan into its largest state-owned banks, which are facing challenges such as shrinking profit margins, declining profits and rising non-performing loans. This is the first major capital injection since the 2008 global financial crisis.
The U.S. dollar is under downward pressure as the likelihood of further interest rate cuts by the U.S. Federal Reserve (Fed) rises at its upcoming policy meeting. Markets are pricing in a roughly 50% chance that the Fed will cut interest rates by a total of 75 basis points to 4.0-4.25% by the end of the year, according to CME’s FedWatch tool.
Federal Reserve Governor Adriana Kugler said on Wednesday that she “strongly supports” the Fed’s decision to cut interest rates by half a percentage point last week. According to Bloomberg, Coogler further said that if inflation continues to ease as expected, then another rate cut would be appropriate.
Traders are likely to focus on the final annual rate of U.S. second-quarter (Q2) gross domestic product (GDP) scheduled to be released later in the North American session.
You Might Be Interested In:
- AUD/USD Rises To Over Two-Week High, With 0.6800 Mark Just Around The Corner
- UK Inflation Data Opens Door To Next Rate Cut
- Eurozone PMI Unexpectedly Contracted, EUR/USD Fell Sharply Below 1.1100
