Currency sentiment: USD - Neutral, CNY - Bullish
Reference time frame: Short-term
The recently published Caixin Manufacturing PMI data for China exceeded both the previous and forecasted figures, indicating an expansion in the manufacturing sector. This positive data suggests that China's economy is showing signs of resilience and growth, which could potentially lead to increased demand for the Chinese Yuan (CNY) as investors seek exposure to a strengthening economy.
On the other hand, the US Dollar (USD) remains neutral as a mixed bag of economic indicators has been released recently. While the US economy continues to show strength in areas such as employment and GDP growth, there are concerns about slowing retail sales and manufacturing activity. The Federal Reserve's decision to keep interest rates unchanged also adds to the uncertainty surrounding the USD.
In the short-term, the bullish sentiment towards the CNY could lead to a strengthening of the currency against its major counterparts, including the USD. However, the USD's neutral stance may limit the extent of any potential depreciation against the CNY. Traders and investors should closely monitor further economic data releases and geopolitical developments to gauge the direction of these benchmark currencies.