Forex – Yuan, U.S. Dollar Flat as Traders Await More Trade News, U.S. Data
Investing.com – The Chinese yuan and the U.S. dollar were little changed on Wednesday in Asia as traders await further news on the Sino-U.S. trade front.
The USD/CNY pair traded near flat at 6.8744 by 1:30 AM ET (05:30 GMT). The yuan has been under pressure since the beginning of the week as intensifying tariffs dispute between the U.S. and China raised fears of worsening economic outlook for both nations.
Risk sentiment improved somewhat after U.S. President Donald Trump said that he would meet with his Chinese counterpart Xi Jinping at the G20 meeting on June 28 and 29 and that he believed trade talks would be “very successful.”
His comments pushed the yuan higher and allowed a recovery from this year’s low. The Chinese currency also received some support from reports that the People’s Bank of China stepped in on Tuesday with an injection of 200 billion yuan (approximately $29 billion).
Meanwhile, The foreign exchange market showed little reaction to worse-than-expected growth in Chinese industrial output and retail sales for April.
Growth in the country’s industrial output slowed to 5.4% in April from a 4-1/2 year high in March, data showed this morning. Analysts previously expected industrial output to grow 6.5%.
Meanwhile, fixed-asset investment rose 6.1% in January-April from the same period last year, also lagging expectations.
Private-sector fixed-asset investment, which accounts for about 60% of overall investment in China, rose 5.5% in the same period.
Retail sales rose 7.2% in April on-year, missed a forecast rise of 8.6%.
The U.S. dollar index that tracks the greenback against a basket of other currencies was flat at 97.317. Traders immediate focus will be the upcoming U.S. retail sales and industrial product for April due later in the day for pointers on the state of the global economy.
The Aussie Dollar, a proxy for Chinese growth, fell 0.2% to 0.6929 against the U.S. dollar. The currency pair hovered close to its lowest since early January after data showed the pace of growth in Australian wages came to a halt last quarter.