Yahoo Finance Yuan Slips Despite Strong Factory Surveys; U.S. Dollar Falls
Investing.com - The Chinese yuan fell on Monday in Asia despite an unexpected improvement in the country’s factory activity.
The USD/CNY pair last traded at 6.7054 by 1:27 AM ET (05:27 GMT), down 0.1%.
The Caixin/Markit PMI came in at 50.8 for March, higher than the expected 49.9. The official PMI that was released on Sunday also rose 50.5 from February’s 49.2. It was the first expansion in four months.
A reading below 50 signals contraction, while a reading above that level indicates expansion.
The upbeat data lifted investor sentiment and pushed Chinese stocks higher by more than 2.5%. The Chinese yuan, however, traded slightly lower today.
Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies was down 0.14% to 96.713. The dollar weakened since Friday after data showed U.S. consumer spending barely rose in January.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.1% in January, following a 0.6% decline in December, its first drop since September 2016.
Looking ahead, investors will be closely monitoring Friday’s U.S. government employment report for March, with figures on wage growth likely to be closely watched after the Federal Reserve appeared to rule out the likelihood of any rate hikes this year.
Markets will also get an update on U.S. retail sales and manufacturing activity.
On the Sino-U.S. trade front, Chinese Vice Premier Liu He will travel to Washington this week to meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin for more trade talks.
The AUD/USD pair gained 0.4% to 0.7121 even after a National Australia Bank Ltd. report showed Monday that the country’s business confidence fell to zero in March from 2 the previous month.
The USD/JPY pair edged up 0.2% to 111.03.
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