Yuan Weakens After Chinese Trade Data

The Chinese yuan fell today even as data released over the weekend showed that the nation’s trade balance improved. The caveat is that the improvement was a result of the sharp drop of imports, not due to growth of exports (which actually also fell, just not as much as imports).
The Customs General Administration of China reported that China’s trade surplus expanded from $49.6 billion to $60.0 billion in January even though most analysts expected a small decline. At the same time, the data revealed that exports dropped 3.2 percent while imports slumped 19.7 percent. It bodes ill not only for the yuan but also for currencies of major China’s trading partner, including the Australian dollar (which performed rather well at the start of the week).
USD/CNY rose from 6.2440 to 6.2472 as of 15:14 GMT today.

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