USD/CNH steadies amid weak October China trade data – BBH
USD/CNH trades near the midpoint of a two-month range as China’s October trade data shows soft exports and weak domestic demand, BBH FX analysts report.
US-China trade surplus narrows to five-year low
"USD/CNH is trading near the middle of a two-month 7.0900-7.1500 range. China’s October trade data continues to point at weak domestic demand activity and decoupling with the US. In the twelve months to October, China’s trade surplus totaled $1168bn, down slightly from September’s record high of $1173bn, while the trade surplus with the US narrowed to near a five-year low at $448bn."
"In October, both exports and imports fell short of expectations. Exports unexpectedly fell -1.1% y/y (consensus: 2.9%) vs. 8.3% in September and imports rose 1.0% y/y (consensus: 2.7%) vs. 7.4% in September. Softer import growth underscores persistently weak domestic demand."
"In our view, a gradual revaluation of China’s currency could help China stimulate consumer spending by boosting disposable income through cheaper imports. Bottom line: USD/CNH has room to break lower."
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FXStreet Insights Team
FXStreet
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