Commerzbank analyst Volkmar Baur expects only gradual yuan gains against the U.S. dollar as China draws support from net exports, provided the dollar stays strong on a trade-weighted basis, FXStreet reported.
The National Bureau of Statistics of China (NBS) said gross domestic product grew 4.5% from a year earlier in the third quarter, up from 4.3% in the second. Growth for the first nine months was 4.6%. The government’s target for the full year is 4.5% to 5%.
Across those nine months, fixed asset investment excluding rural households fell 7.2% from a year earlier, including a 20.6% decline in real estate development investment. Retail sales of consumer goods rose a nominal 1.1% in September.
The General Administration of Customs reported that the value of goods exports rose 16.4% in January-September to 23,197.9 billion yuan. Of the 4.6% nine-month GDP increase, the NBS attributed 2.1 percentage points to final consumption, 1.3 points to capital formation and 1.2 points to net exports of goods and services. Those contributions cover the nine-month period, not the third quarter alone.
Baur argued that a faster yuan rise against the dollar would also strengthen it against other trading partners’ currencies while China depends on net exports for part of its growth, FXStreet reported. His outlook also rests on the dollar remaining strong against a trade-weighted basket of currencies.
Baur suggested that growth near the official target could leave officials with little reason to introduce major new stimulus, FXStreet reported. The NBS warned that domestic demand remained too weak.
The China Foreign Exchange Trade System published a yuan midpoint of 6.7200 yuan per U.S. dollar on Oct. 20, as listed by the State Administration of Foreign Exchange (SAFE). The Oct. 19 midpoint was 6.7208 yuan per dollar. These are daily reference rates, not spot closing prices.
The next scheduled NBS purchasing managers’ index release is due Oct. 30 at 9:30 p.m. ET (Oct. 31 at 9:30 a.m. Beijing time). The agency marks the calendar date as preliminary.
