Resurgent yuan approaches six-month high
This is despite China’s exports in dollar terms falling 4.4% in December from a year earlier and imports 7.6%, the worst readings since 2016
Hong Kong — China’s yuan is shrugging off poor economic data to head for its strongest level in six months, but the gains are coming so fast they’re casting uncertainty over the rally’s longevity. The currency rose as much as 0.42% to 6.7383 per dollar on Tuesday, in line for its highest close since July. It has rallied 1.8% in 2019, the third-best performer out of 11 Asian exchange rates tracked by Bloomberg. The advance comes amid a string of worse-than-expected economic numbers, spurring warnings from the likes of Mizuho Bank and Rabobank that a correction could be on the horizon. “The yuan has reached its peak in the short term, as weak economic fundamentals won’t support a further rapid rally,” said Xia Le, Hong Kong-based chief Asia economist at Banco Bilbao Vizcaya Argentaria. Trade data could get “uglier” in the coming two quarters, he said. “The central bank may take measures, such as verbal warnings and window guidance, to slow the appreciation.” China’s exports in dollar ...
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