Yuan, U.S. Dollar Flat as Traders Await More Trade News, U.S. Data
The Chinese yuan and the U.S. dollar were little changed on Wednesday in Asia as traders awaited further news on the Sino-U.S. trade front.
The USD/CNY pair traded near flat at 6.8744 by 1:30 AM ET (05:30 GMT). The yuan has been under pressure since the beginning of the week as the intensifying trade dispute between the U.S. and China raised fears over the outlook for global growth.
Risk sentiment improved somewhat after U.S. President Donald Trump said that he would meet with his Chinese counterpart Xi Jinping at the upcoming G20 meeting in late June and that he believed trade talks would be “very successful."
His comments saw the yuan recover from the lowest levels of the year. The Chinese currency also received some support from reports that the People’s Bank of China stepped in on Tuesday with an injection of 200 billion yuan (approximately $29 billion).
The foreign exchange market showed little reaction to worse-than-expected growth in Chinese industrial output and retail sales data for April.
Growth in the country’s industrial output slowed to 5.4% in April from a four-and-a-half year high in March, data on Wednesday showed. Analysts had expected industrial output to increase by 6.5%.
Fixed-asset investment rose 6.1% in January-April from the same period last year, also lagging expectations. Private-sector fixed-asset investment, which accounts for about 60% of overall investment in China, rose 5.5% in the same period.
Retail sales rose 7.2% in April on-year, missed a forecast rise of 8.6%.
The U.S. dollar index that tracks the greenback against a basket of other currencies was flat at 97.317. Traders immediate focus will be the upcoming U.S. retail sales and industrial product for April due later in the day for pointers on the state of the global economy.
The Australian Dollar, a proxy for Chinese growth, fell 0.2% to 0.6929 after data showing that the pace of growth in Australian wages came to a halt last quarter.