Chinese Yuan-growth Leader on Asia FX
2023.03.03 03:01
Chinese Yuan-growth Leader on Asia FX
By Tiffany Smith
Budrigannews.com – The Chinese yuan was among the best performers this week on a string of strong economic readings, despite growing concerns about the direction of U.S. monetary policy on Friday.
The was expected to finish the week nearly 0.8% higher after gaining 1%.
On Friday, a private survey revealed that Chinese growth in February accelerated beyond expectations. This week, government data showed that China’s growth was at its fastest rate in over a decade, confirming the country’s recovery from COVID.
The and are both expected to finish the week higher as a result of the yuan’s gains spreading to other currencies that are exposed to China.
The prospects for Asian economies could improve this year if China’s recovery is a positive sign for nations that have a significant trade relationship with the Asian superpower. The positive data on Friday also came before a meeting of high-ranking Chinese officials that starts on Saturday.
However, the majority of other Asian currencies remained within narrow ranges on Friday as they surged overnight following a weekly decline that indicated job market resilience. On Friday, the dollar also held steady against a basket of currencies, with and both falling 1%.
The dollar was destined for modest weekly losses.
With Atlanta Fed President Raphael Bostic backing a 25 basis point hike at the March meeting, overnight comments from Federal Reserve officials provided some clarity on where U.S. interest rates could peak this year.
However, officials also cautioned that the Fed’s stance will be heavily influenced by data, which, given that the reading was higher than anticipated in January, could keep interest rates higher for a longer period of time.
As data revealed weakening economic trends in the country, the gained 0.1 percent and was suffering some losses for the week. Friday’s data showed a decrease from a record-high in February, but it remained pinned at relatively high levels.
This week, data showed that the grew 7% in 2022, far outperforming its Asian peers. As a result, the was expected to rise 0.8 percent this week. Indian growth in February was also higher than anticipated, indicating that the South Asian economy remains resilient.
