Chinese Yuan Weakens As Exports Plunge 21% in February

Mar 12,2019 11:57   Source:Earnforex

Chinese 100-yuan notesThe Chinese yuan is weakening against a basket of currencies to start the trading week, driven by new data that shows exports posted a double-digit decline last month. The ongoing US-China trade discussions lingered in the background as both sides negotiate over the yuan and exchange rates.

According to the National Bureau of Statistics of China, the world’s second-largest economy witnessed its export industry suffer the worst month in three years. Because of a cooling global economy and a trade war with the US, Chinese exports fell 21% in February compared to the same time a year ago.

The data surprised investors because Chinese exports reported an unexpected rebound in the previous month, which was mostly attributed to companies completing orders ahead of the Lunar New Year.

Due to tariffs on approximately $250 billion worth of Chinese products, the value of goods shipped to the world’s largest economy tumbled much more sharply than for other major markets.

President Donald Trump has stated that both countries are “very, very close” to striking a new trade agreement. Reaffirming previous reports, the president said he plans to meet with President Xi Jinping for a “signing summit” at the end of March. However, Terry Brandstad, the US ambassador to China, noted that “a date hasn’t been finalized, though he stated that “significant progress” has been made.

So, what is holding up the trade talks? According to several reports, it appears to be about monetary policy.

The US government is pushing China to commit to stabilizing the yuan. While the People’s Bank of China (PBOC) has made it clear that it has intended to keep the currency stable for quite some time, Beijing is pushing back about the one-sided demand.

PBOC Governor Yi Gang and Vice Commerce Minister Wang Shouwen demanded that currency enforcement must be “two way, fair and equal.”

The two sides discussed issues on the yuan including the need to abide by previous commitments made by the G-20 nations including not to engage in competitive depreciation and to communicate closely on currency issues.

The negotiators discussed the necessity to respect the autonomy of each other’s monetary policy, a market-oriented foreign exchange mechanism and the disclosure of information according to International Monetary Fund standards.

President Trump has accused China of suppressing the yuan for years, but the numbers suggest that up until the recent collapse, the yuan had been appreciating.

The USD/CNY currency pair rose 0.07% to 6.7264, from an opening of 6.7216, at 17:54 GMT on Monday. The EUR/CNY climbed 0.13% to 7.5595, from an opening of 7.5500.


© AndrewMoran for Forex News, 2019. | Permalink | No comment | Add to del.icio.us
Post tags: , , , , , , , ,

Feed enhanced by Better Feed from Ozh



沪ICP备13043996号-3  TradeQQ Media Group 汇讯通