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USD/CNH hits 13-month lows below 7.0800 as Fed rate cut bets increase

The post USD/CNH hits 13-month lows below 7. 0800 as Fed rate cut bets increase appeared com. USD/CNH extends its losses for the fourth consecutive day, reaching a 13-month low of 7. 0782 during the Asian hours on Wednesday. The pair depreciates as the US Dollar (USD) comes under pressure, with softer United States (US) economic data boosting expectations of a Federal Reserve (Fed) rate cut in December. The CME FedWatch Tool suggests that markets are now pricing in more than 84% odds that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, up from 50% probability that markets priced a week ago. The US Census Bureau released US Retail Sales on Tuesday, which rose by 0. 2% month-over-month (MoM) in September, slowing from the 0. 6% increase seen in August, indicating more cautious consumer spending. Retail Sales Control Group declined 0. 1%, against the expectations of a 0. 3% rise and the previous 0. 6% growth. Separately, the Conference Board reported a sharp deterioration in household sentiment, with Consumer Confidence sliding 6. 8 points to 88. 7 in November from 95. 5 in October. The US Producer Price Index (PPI) remained steady at 2. 7% year-over-year in September, matching expectations and August’s reading and suggesting that inflationary pressures have stabilized. Core PPI eased to 2. 6% from 2. 9%, undershooting forecasts of 2. 7%. China’s central bank set a slightly stronger daily Chinese Yuan fixing on Wednesday, reinforcing its steady approach to managing currency movements amid shifting global financial conditions. The daily fixing acts as the midpoint around which the Yuan can trade, allowing a 2% move in either direction in the onshore market. A stronger fixing is often viewed as an indication of policy intent, either to guide the Yuan movement or to curb excessive fluctuations. As Beijing maintains a firm hand on the exchange-rate regime, the latest adjustment underscores its focus on preserving orderly market conditions. According to.