Currency News: Yuan Drops as Chinese Data Softens
CURRENCY NEWS – On Thursday, the Chinese yuan dropped following the release of the Chinese report regarding its weak data.
As of 12:30 AM ET (05:30 GMT), the USD/CNY pair increased 0.13% to 6.8917.
Moreover, yuan’s declined followed after the release of the official data. It showed that there was a more-than-expected slowdown in China’s retail sales and industrial output.
The country’s retail sales rose 8.1% year on year, lower than the median forecast of 8.8%. Further, Reuters’ record revealed that this year’s growth data was the weakest one since 2003.
The growth in industrial output also declined half a percentage point in achieving a year-on-year increase of 5.4%. This was lower than the 5.9% market projection.
Meanwhile, there was a 5.9% growth seen in the fixed-asset investment from January to November. This was marginally higher than the 5.8% expectation in the last session.
The People’s Bank of China (PBOC) set a 6.8750 reference rate for the yuan. This is lower than the previous day’s fix of 6.8769.
The US dollar index, which tracks the greenback’s strength against a basket of other currencies, added 0.1% to 97.118. This was amid the anticipation of investors regarding the expected interest rate hike of the US next week.
Moreover, the US Federal Reserve is likely to impose another rate hike for the fourth time this year. Analysts will have more focus on the policy outlook next year. However, the 2019 policy outlook has more uncertainty.
Currency News: Dollar remains firm amid a shift of investors focus to Fed
On Friday, the US dollar remained firmed in battling against major peers. This was amid the shift of investor’s focus on the expected Fed rate hike next week. However, the increased uncertainty regarding the 2019 policy outlook might limit the gains.
The pressured euro and pound provided a broad support to the greenback. This was after the European Central Bank President’s downbeat comments regarding the eurozone outlook and Brexit fresh concerns.
The market participation has shifted their immediate global trade issues to the imminent December 18-19 meeting of the Federal Reserve.
There are expectations that the Fed will broadly impose a 25-basis-point rate hike next week. This was the fourth time that the Fed will impose a rate hike.
“There is a lot of disagreement in the markets over the Fed’s rate hike course in 2019 with traders expecting anywhere between one to four rate hikes,” said CMC Markets Chief Markets Strategist Michael McCarthy.