The Chinese yuan gained today even though the index of the services sector dropped significantly last month. The most likely reason for the rally was stimulating measures from China’s central bank.
The HSBC China Services Business Activity Index dropped to 51.8 in January from 53.4 in December. While the gauge remained in the expansionary territory, the slowing growth was a bad sing nevertheless. The report followed data released earlier this week that demonstrated a decline of the manufacturing sector. As a result, it is not a surprise that the People’s Bank of China took measures to reinvigorate economic growth, reducing the reserve requirements ratio today.
USD/CNY declined from 6.2577 to 6.2481 as of 12:37 GMT today.
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