• USD/CNH picks up bids to refresh intraday high, up for the third consecutive day.
• PBoC cuts one-year, five-year LPRs by 10 basis points.
• Hawkish Fed bets gain momentum after Juneteenth holiday.
• Mixed clues about US-China ties, fears of China’s slower economic recovery also propel offshore Yuan price.

USD/CNH justifies the People’s Bank of China’s (PBoC) rate cut as it marches towards the 7.1800 round figure during a three-day winning streak amid early Tuesday. That said, the offshore Chinese Yuan (CNH) renews its intraday high near 7.1770 by the press time.

People's Bank of China (PBoC) cuts its benchmark Loan Prime Rates (LPRs) by 10 basis points (bps), matching market expectations. That said, the one-year LPR was reduced from 3.65% to 3.55% while the five-year LPR currently stands at 4.20% from 4.30% previous readings.

Apart from the PBoC rate cuts fears of China’s slower economic recovery and the downward growth forecasts from the top-tier banks, including Goldman Sachs and JP Morgan, seem to also propel the USD/CNH price of late.

Elsewhere, US Secretary of State Antony Blinken recently met China President Xi Jinping and Beijing’s top diplomat Wang Yi and raised hopes of an easing in the US-China ties. After the meeting, China President Xi Jinping said that he hopes through the visit, Blinken will make more positive contributions to stabilizing US-Sino relations. However, China’s top diplomat Wang Yi said on Monday, “China has no room for compromise and concessions on the Taiwan issue,” Ahead of that, the diplomats held what both called candid and constructive talks on their differences from Taiwan to trade but seemed to agree on little beyond keeping the conversation going.

On the other hand, the Fed monetary policy reports to the US Congress and the latest comments from the Fed officials have been hawkish and favor the US Dollar bulls. That said, the Fed policy report for Congress said, “Inflation in the US is well above target and the labor market remains very tight,” as per Reuters. Among the Fed talkers, Richmond Fed President Thomas Barkin, Chicago Fed President Austan Goolsbee and Federal Reserve Governor Christopher Waller were the important ones who appeared a bit hawkish of late and helped propel the USD/CNH bulls.

Looking ahead, a return of the full markets may entertain the DXY traders with the US housing numbers on the calendar to watch. Though, major attention will be given to Fed Chair Jerome Powell’s Testimony and preliminary readings of June’s PMIs for a clear short-term view.

Technical analysis

A clear bounce off the 21-DMA support of 7.1220 directs the USD/CNH bulls toward the late November 2022 high of near 7.2600. However, the latest peak of near 7.1925 and the 7.2000 psychological magnet may test the pair buyers.