Yuan falls after weak Chinese economic data
2023.01.17 02:41
Yuan falls after weak Chinese economic data
By Ray Johnson
Budrigannews.com – The yuan was one of the worst performers on Tuesday as data revealed that COVID lockdowns in 2022 hammered Chinese economic growth, causing the majority of Asian currencies to fall.
After data showed that the Chinese economy grew at a faster rate than the previous year, the fell 0.4% to 6.7611, coming off a high that had been near five months. Anti-COVID lockdowns on and off were largely responsible for the current trend.
However, as the nation began to deviate from its strict zero-COVID policy, the economy during the fourth quarter and December data also exceeded expectations.
The mixed GDP data and rising COVID-19 cases have cast doubt on the timing of such a recovery, despite the fact that the loosening of anti-COVID measures is anticipated to eventually spur a Chinese economic recovery this year.
As a result of the revelation that two-thirds of the economists surveyed anticipated a recession this year, fears of a global recession were heightened, and Asian currencies in general fell. PricewaterhouseCoopers also conducted a separate survey of business leaders and found that this year’s economic outlook was dim.
In Asia, the and lost 0.3% and 0.4%, respectively, while the lost 0.7% and 0.7%, respectively. The rupee was also hurt by data that showed India’s December logged weaker than expected and a widening.
The and caught some safe haven bids after recovering slightly from a seven-month low.
Since Asian currencies typically benefit from a risk-on environment that ensures steady capital flows to the region, a global recession bodes poorly for them. Asian growth and currencies could be further harmed as a result of the negative effects on major economies.
As markets prepared for further hawkish cues from the later this week, the fell 0.2 percent but remained just below a seven-month low.
On Wednesday, the central bank is likely to maintain record-low interest rates. After the bank unintentionally altered the mechanism in December, any potential modifications to its yield curve control are now under consideration.
After data showed that the country’s key shrank significantly more than anticipated in December, the fell 0.1%, highlighting additional obstacles for the Asian financial hub in the near future.
More Dollar falls Yen strengthens on Asia FX
