The Chinese yuan is strengthening against several major currencies on Tuesday, supported by solid housing prices and retail sales in May. Although industrial output and fixed asset investment figures came in lower than expected, they were still commendable at a time when the worldâs second-largest economy is engaged in a bitter trade war with the US.
According to the National Bureau of Statistics (NBS), the average price of newly constructed homes in the countyâs biggest cities surged by 10.7% year-on-year in May, matching the same level in the previous month. The market had forecast 11% growth. The largest gains occurred in Guangzhou (12.2%), Beijing (3.9%), Shanghai (1.7%), and Shenzhen (1.2%).
The gains were attributed to the government loosening restrictions and regulations in smaller municipalities and the Peopleâs Bank of Canada (PBOC) easing monetary policy to boost lending and lower interest rates.
On Friday, it was reported that May retail sales soared by 8.6%, up from 7.2% in April. The median estimate was 8%. The biggest increases were found in cosmetics (16.7%), telecoms (6.7%), furniture (6.1%), home appliances (5.8%), and jewelry (4.7%).
Industrial production in May climbed 5%, down from 5.4% in the previous month. Analysts had anticipated last monthâs numbers would mirror the gains in April. Fixed asset investment also rose 5.6%, but it was down from the previous monthâs 6.1% and lower than the 6% advance the market had penciled in.
Asian markets tumbled ahead of this weekâs Federal Reserve policy meeting, but they are expected to rebound on Wednesday after President Donald Trump tweeted that he had a productive phone call with President Xi Jinping pertaining to tariffs.
Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.
In recent weeks, Trump threatened to raise tariffs on more Chinese goods should Xi refuse to attend the G20 summit.
The USD/CNY currency pair tumbled 0.22% to 6.9106, from an opening of 6.9259, at 14:02 GMT on Tuesday. The EUR/CNY fell 0.43% to 7.7347, from an opening of 7.7726.
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