At first glance, Chinese figures once again seem impressive. GDP grew by 5.2% in the second quarter compared to the previous year, and industrial production even increased 6.8% in June, significantly faster than most analysts had expected, says Volkmar Baur, Commerzbank’s currency analyst.
The PBOC will not have trouble keeping the USD/CNY stable
“However, Chinese data also reveal a series of weaknesses, particularly on the demand side. Retail sales once again disappointed with an interannual growth of only 4.8%, and investment figures for June were well below expectations. Officially, only figures that cover the entire period from the beginning of the year are published. compared to the previous year. “
“This is due in particular to the continuous weakness in the real estate market, where there are still no signals of improvement. However, the weak domestic demand continues to promote China’s net exports. The data published on Monday showed an additional increase in the commercial surplus to 114.8 billion USD, the second highest surplus ever recorded after January this year.”
“As a result, Chinese state banks have been able to accumulate currency reserves in recent weeks, although the Central Bank has reduced them slightly. In general, it can be assumed that the Chinese banking system has avoided a stronger appreciation of the CNY in recent weeks. Therefore, the PBOC should not have problems to keep the USD/CNY stable in the coming weeks, if you wish.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
