- Offshore Yuan drew bids after China reported an above-forecast trade data for March/
- Imports grew in March versus expectations for contraction, while exports fell, but at a much slower rate than expected.
A better-than-expected China data released a few minutes before press time strengthened the bid tone around the offshore Yuan (CNH), pushing the USD/CNH pair down to fresh session lows.
China’s imports in yuan terms, an indicator of domestic demand, rose 2.4% year-on-year in March, beating the expected drop of 7% by a big margin, having declined by 2.4% in February.
Meanwhile, exports or outbound shipments fell by 3.5%, but the drop was moderate compared to the expected slide of 12.8%. Exports had declined by 15.9% in February. The trade surplus narrowed to CNY 130 billion in March from CNY 158.5 billion in February.
The above-forecast data could alleviate concerns regarding a deeper coronavirus-led economic downturn in the Chinese and the global economy.
The CNH rose from 7.0477 per US dollar to a new session low of 7.0434 in a knee jerk reaction to the above-forecast trade data. The previous session low was 7.0451.
The Chinese currency is now trading near 7.0483 per US dollar, up 0.10% on the day. The People’s Bank of China set the daily yuan reference rate at 7.0406 early Tuesday versus Monday’s fix at 7.0300. Even so, the CNH gained ground earlier today, possibly due to the drop in the number of new coronavirus cases.
The world’s second-largest economy reported 89 new coronavirus cases in the mainland on April 13 versus 108 a day earlier. Further. there were zero deaths on Monday compared to two fatalities on April 12.
Technical levels
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