The Chinese yuan is struggling to find direction to kick off the trading week after economic growth slowed to its lowest level in nearly three decades. But it was not all bad news for the worldâs second-largest economy as an influx of data came in better than expected, giving the yuan some support.
The big news on Monday was the gross domestic product growth rate coming in at 6.2% in the second quarter, down from 6.4% in the previous quarter, according to the National Bureau of Statistics (NBS). The figure did match market forecasts, but it did mean that economic growth slumped to its weakest since 1992.
GDP quarter-on-quarter rose 1.6% in the April-to-June period, up from 1.4% in the January-to-March timeframe. It was also higher than the median estimate of 1.5%.
While economic growth disappointed investors, there was plenty of ebullience regarding other areas of the economy that were better than what the estimates expected.
Year-over-year retail sales surged 9.8% in June, up from 8.6% in the previous month. Industrial production YoY clocked in at 6.3% last month, up from 5% in May. Industrial capacity utilization in Q2 was 76.4%, a 0.5% jump from the previous quarter. YoY fixed asset investment was 5.8% in June. The June house price index did come in much lower than what analysts anticipated, but it still enjoyed a reading of 10.3%.
On Friday, June trade was in the spotlight because the US and China recently reignited negotiations that could lead to a new trade agreement. General Administration of Customs data found that the trade surplus widened to $50.98 billion from $40.91 billion at the same time a year ago. Imports contracted 7.3% and exports fell 1.3%.
Moreover, Chinese financial institutions lent out $240 billion in net new yuan loans last month, higher than the $170 billion from the previous month.
Next on the schedule this week are year-to-date industrial profits in June.
The USD/CNY currency pair dipped 0.04% to 6.8778, from an opening of 6.8808, at 16:32 GMT on Monday. The EUR/CNY fell 0.12% to 7.7468, from an opening of 7.7564.
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Chinese Yuan Tries to Find Direction on Slowing GDP, Strong Data
