The Chinese yuan is tumbling on Tuesday after President Donald Trump told reporters that a trade agreement with China can wait. The remarks offset positive manufacturing data that showed the industry expanded for the first time in seven months. The yuan remains firmly entrenched in the 7 territory against the US dollar after appreciating on hopes of a trade agreement.
According to the National Bureau of Statistics (NBS), the official manufacturing purchasing managersâ index (PMI) climbed to 50.2 in November, up from 49.3 in October. This beat market expectations of 49.5. It was an importing reading because it is the first time that factory activity has expanded since April and it represents the biggest output volume in eight months.
Despite the bullish nature of the numbers, the specifics were somewhat mixed. New orders returned to growth, but employment levels continued to slide. Input prices slumped but selling prices declined. Overall, business confidence strengthened to a seven-month high.
On Wednesday, the Caixin Markit services and composite PMI readings will come out
Global financial markets were reeling when Trump said during a NATO summit that he does not have a deadline for a US-China trade deal. He suggested that it might even happen until after the election.
In some ways, I think itâs better to wait until after the election if you want to know the truth. But Iâm not going to say that, I just think that.
The White House said on Monday that it has no plans to delay, rollback, or eliminate the planned US tariffs on the remaining $156 billion in Chinese goods on December 15.
President Trump also threatened to impose tariffs of up to 100% on $2.4 billion in French goods. This would be a retaliatory measure for France slapping a digital tax on US companies, including Amazon and Google. However, he did concede that it was a minor issue, noting that âI think weâll probably work it out.â
The USD/CNY currency pair rose 0.31% to 7.0612, from an opening of 7.0394, at 15:53 GMT on Tuesday. The EUR/CNY advanced 0.4% to 7.8299, from an opening of 7.7993.
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