The Chinese Yuan has weakened against the US Dollar after the Chinese Central Bank forced the currency to weaken to allow it to stay within the permitted trading range. The heavily controlled currency is only allowed to diverge from the fixed rate by a maximum of 1%. The Dollar Index (DXY) was headed for the biggest three-day gain since July as Group of Seven finance chiefs indicated they will tolerate the Japanese Yen’s decline.
Economic data out of China painted a mixed picture. The nation recorded a modest improvement in its industrial output and retail sales for April but they were not enough to ease investor fears that the world’s second largest economy is struggling to make a strong recovery. Analysts said that the upturn in figures was unimpressive due to the steady flow of cash being pumped into the economy via banks and other financial institutions.
Industrial output increased by 9.3% compared to the previous year, but was still below economist expectations of a 9.5% increase. The figure is the fourth consecutive month that the figure was below last year’s 10% level. Retail sales were up by 12.8% in April accelerating from the 12.6% increase seen in March.
“We do not believe that the April numbers represent a substantive uptick in activity,” said Alistair Thornton of IHS Global Insight. “This is not the start of a rally.”
China will abolish 24 regulations on foreign-exchange regulations for foreign direct investment, the State Administration of Foreign Exchange said on May 11th. The Yuan will play a more significant role in the FX market over the next few years.
Current Chinese Yuan (CNY) Exchange Rates
The Australian Dollar/Chinese Yuan Exchange Rate is currently in the region of: 6.1392
The Euro/ Chinese Yuan Exchange Rate is currently in the region of: 0.7974
The Pound Sterling/ Chinese Yuan Exchange Rate is currently in the region of: 9.4470
The New Zealand Dollar/ Chinese Yuan Exchange Rate is currently in the region of: 5.1048
(Correct as if 10:15 am GMT)
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