• Shanghai Composite inches down 0.01% and Shenzhen Component loses 0.36% as private survey confirms contraction in Chinese manufacturing activity for the fourth consecutive month.
• Chinese authorities pledge to boost the economy by restoring and expanding consumption in key sectors, including automobile, real estate, and services.
• Offshore yuan depreciates past 7.15 per dollar, facing pressure from weak economic data and global demand.
• China’s 10-year government bond yield remains below 2.7%, influenced by soft economic data and expectations of further policy easing.
• Chinese economy grows 6.3% in Q2, lower than expected, raising bets for additional stimulus measures. People’s Bank of China keeps key short-term interest rates unchanged in July.

The higher dollar index for the session could put pressure on the Chinese Yuan. The rate appears to have established a balanced price range, and today’s session might see Yuan buyers testing the upper extreme while targeting the swing for absorption purposes.

On the daily interval, it seems that traders are building core dollar positions to aim for the upper extreme of the daily bracket. The Chinese central bank’s economic stimulus measures could act as a pressure factor for the currency, potentially benefiting the dollar in this pair.

Still, the mentioned micro balanced area could be established by Chinese Yuan buyers around the upper extreme for the time being, with potential risk adjustments around the swing highs.

Actually, the month of July closed with a gain of about 1.5% against the dollar, and the rate might continue to attract dollar buyers around the upper value extreme of the Year’s developing value area, serving as a supportive level.

(Click on image to enlarge)

More By This Author:

US Stocks Close July With Modest Gains, Dollar Index Faces Monthly Decline
Crude Oil Prices Surge On Tightening Supply And Demand Optimism
Crude Oil Futures Steady Despite Inflation Concerns