The Chinese yuan weakened today as macroeconomic reports showed that the biggest Asian economy is slowing. Analysts think that the negative data may be bullish for the currency in a longer term as Chinese policy makers will step up to boost growth.
China’s consumer price inflation slowed to 1.8 percent in July, falling from 2.2 percent in June. The Asian economy felt the negative impact of the European troubles as demand for Chinese goods waned. That reflected on the trade balance surplus that shrank from $31.7 billion in June to $25.1 billion in July. Slowdown is evident and many economists believe that China would pursue more aggressive monetary policy.
USD/CNY rose a little from 6.3603 to 6.3611 as of 13:50 GMT today.
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