Yuan Declines as China’s Manufacturing Contracts

The Chinese yuan ticked down today after the nation’s manufacturing sector contracted unexpectedly last month, leading to speculations about monetary easing from the China’s central bank.
China’s manufacturing Purchasing Managers’ Index fell from 50.1 in December to 49.8 in January. A reading below 50.0 indicates contraction of the sector, and it was the first decline in more than two years. The services PMI declined as well though stayed in the expansionary zone. The poor data led to talks that the People’s Bank of China should reduce its reserve requirement ratio and will cut interest rates.
USD/CNY edged up from 6.2500 to 6.2599 as of 16:51 GMT today.

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