• USD/CNH takes the bids to refresh multi-day high, prods late November 2022 peak.
• China’s May Retail Sales, Industrial Production eases below market forecasts and priors.
• Fed matches expectations of keeping benchmark rates unchanged but teased July rate hike.
• US Retail Sales eyed as FOMC flags “meeting by meeting” concept for decision-making.

USD/CNH bulls are on the party mode as they renew the yearly top near 7.1910 after downbeat China data amid early Thursday. Also adding strength to the offshore Chinese Yuan (CNH) pair is the US Federal Reserve’s (Fed) hawking halt.

That said, China’s Retail Sales for May rises 12.7% YoY versus 13.6% expected and 18.4% prior while the Industrial Production growth also eases to 3.5% in the stated month from 5.6% previous readings and 3.6% market forecasts.

It’s worth noting that the People’s Bank of China (PBoC) recently announced rate cuts and bolstered hopes of economic recovery, which in turn may prod the USD/CNH bulls. However, Fed’s hawkish bias keeps fueling the pair prices of late.

On Wednesday, the United States (US) Federal Open Market Committee (FOMC) kept the benchmark Fed rate unchanged at 5.0-5.25%, matching market expectations of pausing the multi-month-old hawkish cycle that propelled rates for 10 consecutive times.

The reason for the firmer USD/CNH price could be linked to the upbeat FOMC Economic Projections and Federal Reserve (Fed) Chairman Jerome Powell’s speech. That said, the dot plot rose 30 bps from March for 2024 and 2025 to 4.6% and 3.4% respectively while the median rate forecasts suggest two more rate increases in 2023. Further, no rate cuts nor recession is expected in the current year whereas the median estimation for the US Gross Domestic Product (GDP) rose to 1.0% from 0.4% in March. Additionally, Powell’s speech unveils a “meeting by meeting” approach for decision-making but signals July as a ‘live’ meeting, suggesting a 0.25% rate hike.

Looking ahead, the Fed has already highlighted importance of each incoming data for decision-making, which in turn emphasizes today’s United States Retail Sales for May and other mid-tier activity data, as well as the weekly Jobless Claims for the USD/CNH watchers