The Chinese Yuan rose against the Pound (CNY/GBP), Euro (CNY/EUR), and US Dollar (CNY/USD) in Wednesday afternoon’s European trading despite the release of lacklustre Chinese data earlier in the session.
Chinese Exports came in at 6.9% in October on the year, despite forecasts for 7.1% and September’s 8.0% reading. Imports also eased in October, coming in at 17.2% on the year, down from the previous month’s 18.6%. The ecostats highlight a slowing in the second half of the year after a red-hot first half. Bejing’s crackdown on pollution has impacted factory output which has been attributed to the weaker reading.
Economist Julian Evans-Pritchard commented:
‘The big picture is that both outbound and inbound shipments have softened recently, a trend that continued last month. We suspect that this reflects a slight easing of growth in other emerging markets along with weaker domestic demand as a result of slower infrastructure spending.’
US President Donald Trump has arrived in China today to discuss trade and North Korea with Chinese President Xi Jinping.
It’s been reported that Jinping will attempt to convince Washington to lift import restrictions on hi-tech items so China could purchase more from US businesses. Another issue for consideration is likely to be focused on forging a stronger cooperation between the two nations in areas such as space and aviation.
In addition, Bejing may encourage the US to calm its search in the case of Chinese IP violation. Jinping’s final focus is reported to be a bolstering of US involvement with China’s Belt and Road Initiative.
Positive developments in these areas could allow the Chinese Yuan to climb against other majors. The CNY/USD exchange rate was offered some support earlier in the session after the US Dollar declined on account of reports that US tax reform plans could be delayed.
The Euro to Chinese Yuan (EUR/CNY) exchange rate is trending at 7.6774. The Pound to Chinese Yuan (GBP/CNY) exchange rate is at levels of 8.682. The US Dollar to Chinese Yuan (USD/CNY) currency pair is trending at 6.6265.