Chinese Yuan Weakens Despite Exports Beating Market Forecasts

The Chinese yuan is falling against several major currency competitors on Tuesday, despite positive trade data that suggest the US-China trade dispute winding down is proving already to be bullish for Beijing. The December numbers are beginning to roll in, and so far, it is good news for the world’s second-largest economy.

According to the General Administration of Customs, the nation’s trade surplus diminished to $46.79 billion last month, down from $56.8 billion in the same month a year ago. It is also below the median estimates of $48 billion.
Exports expanded for the first time since July as they surged 7.6% to $237.65 billion in December. The market had penciled in a gain of just 3.2%. Most of China’s gains were situated in coal and refined products, but it did witness significant declines in aluminum, steel, rare earths, and rice.
Imports spiked 16.3% from the same time a year ago to $190.86 billion, which is the biggest number since October 2018. Analysts had anticipated an increase of 9.6%. Beijing imported more copper, iron ore, crude oil, natural gas, soybeans, and rubber. It did buy smaller amounts of coal and steel.
Automobile sales reported a major improvement from the last couple of years. Last month, vehicle sales fell just 0.1% to 2.66 million units, lifting the 12-month rate to -8.2%. In November, vehicle sales tumbled 3.6%. Investors had expected a drop of 3%.
Next on the data front, gross domestic product, retail sales, and financials will be released this week.
The big news this week will be Vice Premier Liu He signing the first phase of a comprehensive trade agreement in Washington between the US and China. Full details of the pact will be released on Wednesday, but we do know that China will be removed from the Treasury Department’s list of currency manipulations and Beijing will acquire billions more in US goods – and not just agriculture.
Meanwhile, a new Reuters poll of economists says economic growth will slow to a 30-year low of 5.9% this year.
The USD/CNY currency pair advanced 0.11% to 6.9012, from an opening of 6.8936, at 14:11 GMT on Tuesday. The EUR/CNY dipped 0.03% to 7.6759, from an opening of 7.6785.

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Original from: www.earnforex.com