China's yuan dips as weak data raises bets for more easing
SHANGHAI, Sept 3 (Reuters) -China's yuan eased against the dollar on Tuesday as disappointing August factory activity data raised bets for more stimulus in the world's second-largest economy.
With markets now firmly expecting the U.S. Federal Reserve to cut interest rates in September, many yuan traders said that could give Beijing more leeway to manoeuvre its own monetary policy.
"Fed rate cuts provide room for the People's Bank of China (PBOC) to ease without spurring capital outflows," said Chang Wei Liang, FX & credit strategist at DBS.
Analysts at J.P.Morgan also said that easing yuan depreciation pressure in the short term "may open the room for continuing policy rate cuts" in China.
They maintained their expectations of a 10-basis-point rate cut in the fourth quarter of this year and another reduction of the same margin in the first quarter of 2025.
As of 0306 GMT, the yuan CNY=CFXS was 0.08% lower at 7.1230 to the dollar, paring back gains after hitting a near 15-month high of 7.0825 hit late last week.
The yuan is down 0.4% against the dollar this month, and 0.3% weaker this year. It has been under pressure since early 2023 as a prolonged property crisis, anaemic consumption and falling yields drive capital flows out of yuan, and foreign investors stay away from its struggling stock market.
Prior to the market opening, the PBOC set the midpoint rate CNY=PBOC, around which the yuan is allowed to trade in a 2% band, at 7.1112 per dollar, 8 pips firmer than a Reuters' estimate of 7.1120.
Based on Tuesday's official guidance, the trade-weighted CFETS yuan basket index .CFSCNYI, a gauge that measures the yuan's strength against its major trading partners, fell to 98.15, according to Reuters calculations.
"A softer dollar environment allows for the yuan weakness to play out versus its trade peers and hence the yuan CFETS index can go lower," Christopher Wong, FX strategist at OCBC Bank.
"Economic recovery in China remains bumpy while the property market has yet to recover despite measures. Eventual recovery in yuan would require confidence to be 'repaired', economic recovery to gain better momentum and for the dollar to turn lower."
Wong added that policymakers are likely to still be pursuing a measured pace of yuan depreciation from a trade perspective. Exports have been one of the few bright spots for the economy this year but trade disputes are increasingly clouding the outlook.
The CFETS index remained up 0.75% year-to-date, but it was lost about 2.65% from a peak of 100.73 hit in April.
Currency traders said the market focus will be on the U.S. payrolls data due on Friday after Fed Chair Jerome Powell last month endorsed an imminent start to interest rate cuts in a nod to worries over the labour market. FRX/
By midday, the offshore yuan traded at 7.1259 yuan per dollar CNH=, down about 0.11% in Asian trade, while the dollar's six-currency index =USD was 0.07% higher at 101.73.
LEVELS AT 0305 GMT:
INSTRUMENT | CURRENT vs USD | UP/DOWN(-) VS. PREVIOUS CLOSE % | % CHANGE YR-TO-DATE | DAY'S HIGH | DAY'S LOW |
Spot yuan <CNY=CFXS | 7.123 | -0.07 | -0.3 | 7.1166 | 7.1236 |
Offshore yuan spot CNH=D3 | 7.1258 | -0.11 | -0.01 | 7.1145 | 7.127 |
Reporting by Shanghai Newsroom; Editing by Kim Coghill
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
