USD/CNH trades around 7.00 after paring losses, GDP Annualized awaited

• USD/CNH gained ground following China's plans for fresh stimulus measures to support its economy.
• China plans to inject over CNY 1 trillion in capital into its largest state banks, which are facing challenges.
• CME FedWatch Tool suggests around a 50% chance of totaling 75 basis points Fed rate cuts in 2024.

USD/CNH loses ground as China announces plans for additional stimulus measures to bolster its economy, offsetting the diminishing effects of Tuesday's measures. The USD/CNH pair trades around 7.00 during the European hours on Thursday. The People's Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead at 7.0354, as compared to the previous day's fix of 7.0202 and 7.0367 Reuters estimates.

China plans to inject over CNY 1 trillion in capital into its largest state banks, which are facing challenges such as shrinking margins, declining profits, and increasing bad loans. This substantial capital infusion would mark the first of its kind since the 2008 global financial crisis.

The US Dollar (USD) receives downward pressure from rising odds of further interest rate cuts by the US Federal Reserve (Fed) in upcoming policy meetings. According to the CME FedWatch Tool, markets are pricing in around a 50% chance of totaling 75 basis points to be deducted by the Fed to a range of 4.0-4.25% by the end of this year.

Federal Reserve Governor Adriana Kugler said on Wednesday that she "strongly supported" the Fed's decision to cut the interest rates by a half point last week. Kugler further stated that it will be appropriate to make additional rate cuts if inflation continues to ease as expected, per Bloomberg.

Traders will likely observe the release of the final US Gross Domestic Product (GDP) Annualized for the second quarter (Q2) scheduled to be released later in the North American session.