US Dollar steadies as the Greenback not impressed by China’s stimulus plan
LONDON (September 24) The US Dollar (USD) trades mixed on Tuesday after the Chinese government issued measures to reboot its sluggish economy. The main key elements of the plan are the 500 billion Yuan (CNY) cash injection and the liquidity line with the People’s Bank of China (PBoC) that allows funds and brokers to draw cash for buying stocks. This caused the Chinese Yuan (CNY) to rally nearly 0.50% against the Greenback during the Asian trading session on Tuesday.
On the economic data front, a relatively light calendar ahead with some second-tier data on Tuesday. The Richmond Fed Manufacturing Index for September might be the most market-moving, apart from the Federal Reserve Governor Michelle Bowman, who is expected to comment about the US economic outlook and monetary policy.
Daily digest market movers: Happy with where USD is
- On the geopolitical front, a United Nations emergency meeting is called on Tuesday for Lebanon after intense bombing over the weekend and on Monday by Israel.
- This Tuesday will kick off with Federal Reserve Governor Michelle Bowman, who delivers a speech about the US economic outlook and monetary policy at the Kentucky Bankers Association Annual Convention. Comments are expected to come in around 13:00 GMT.
- At that same time, the Housing Price Index for July is expected to be released. A positive 0.2% is expected after the small 0.1% contraction in June.
- At 14:00 GMT, the Richmond Fed Manufacturing Index for September is set to be released, expected to pick up a touch to -17 from -19 in August.
- At the same time, the Consumer Confidence reading is expected to come in at 104.0, better than the 103.3 previously.
- Equity markets are having a field day, with the Chinese Hang Seng and the Shanghai Shenzhen Index trading up over 4% at the close on Tuesday. European and US equities are following suit with smaller gains.
- The CME Fedwatch Tool shows a 48.5% chance of a 25-basis-point rate cut at the next Fed meeting on November 7, while 51.5% is pricing in another 50-basis-point rate cut.
- The US 10-year benchmark rate trades at 3.79%, flirting with a fresh September high.
FXStreet