China's yuan extends losses after first monthly drop in four in October
SHANGHAI, Nov 1 (Reuters) -China's yuan extended losses against the dollar on Friday, after posting its first monthly drop in four in October, as investors remained anxious ahead of the U.S. presidential election next week and its impact on Sino-U.S. trade and economic policy.
But losses in the Chinese currency were somewhat limited by signs of economic improvements seen in recent housing and manufacturing data.
As of 0314 GMT, the onshore yuan CNY=CFXS was 0.09% lower at 7.1243 to the dollar. It weakened 1.4% against the greenback in October to post the first monthly drop since June and is now down 0.3% year-to-date.
Its offshore counterpart CNH=D3 traded at 7.1326 per dollar.
The turnaround in the yuan's movements come as investors have been buying the dollar and selling emerging market currencies, mainly the yuan, in the run-up to the U.S. election next Tuesday in readiness for Republican candidate Donald Trump's possible return to the presidency.
Opinion polls show former President Trump is running neck and neck with Vice President Kamala Harris and the race is too close to call.
As part of his pitch to boost American manufacturing, Trump has promised voters he will impose tariffs of 60% or more on goods from China. Trump's proposed tariff and tax policies are seen as inflationary and therefore likely to keep U.S. interest rates high and undermine currencies of trading partners.
During Trump's first presidency, the yuan weakened about 5% against the dollar during the initial round of U.S. tariffs on Chinese goods in 2018, and fell another 1.5% a year later when trade tensions escalated.
But the yuan's losses were capped in morning deals after private and official surveys both showed China's manufacturing activity swung back to growth in October as an expansion in new orders led to a pickup in production growth.
Prices of new homes in China also rose at a faster pace in October, traditionally a peak season for house-hunting, a private survey showed on Friday.
"The economy has accelerated on policy supports, allowing policymakers to achieve this year's growth target of 'around 5%,'" said Larry Hu, chief China economist at Macquarie.
"As such, the National People's Congress (NPC) meeting may focus on debt swap rather than new stimulus ... The next step of the stimulus will largely be determined by the state of external demand, and the outcome of the U.S. election is a key swing factor."
China's top legislative body will meet from Nov. 4-8, with markets widely expecting the meeting to approve more fiscal stimulus measures.
Sources told Reuters this week that China is considering approving next week the issuance of more than 10 trillion yuan ($1.40 trillion) in extra debt in the next few years to revive its fragile economy, a fiscal package that is expected to be further bolstered if Trump wins the U.S. election.
Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC, around which the yuan is allowed to trade in a 2% band, at 7.1135 per dollar, and 13 pips weaker than a Reuters' estimate CNY=RTRS of 7.1122.
Separately, currency traders said they will monitor U.S. job data due later on Friday for more clues on the health of the world's largest economy, given it could affect Federal Reserve's monetary easing trajectory.
LEVELS AT 0314 GMT:
INSTRUMENT | CURRENT vs USD | UP/DOWN(-) VS. PREVIOUS CLOSE % | % CHANGE YR-TO-DATE | DAY'S HIGH | DAY'S LOW |
Spot yuan <CNY=CFXS | 7.1243 | -0.09 | -0.31 | 7.1139 | 7.1273 |
Offshore yuan spot CNH=D3 | 7.1323 | -0.14 | -0.09 | 7.1181 | 7.1335 |
Reporting by Shanghai Newsroom; Editing by Jamie Freed
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
