Yuan Gains as China Sees Fastest Factory Growth

USDCNH Analysis – The offshore yuan climbed to about 7.25 per dollar, making minor improvements from the previous week as positive economic updates from China lifted investors’ spirits.

A private report revealed that in March, China’s manufacturing sector grew at its quickest rate since February 2023, supporting government data that showed the sector’s first growth in half a year. These new statistics promise China’s economic comeback and global supply and demand health.

However, the yuan’s value stayed near its lowest in four months, with speculation that China might relax its policies to stimulate growth. This speculation comes as interest rates in the US are expected to stay high due to persistent inflation. A high-ranking official from the central bank mentioned that there’s still a chance for the People’s Bank of China to further reduce the reserve requirement ratio for banks.

Additionally, President Xi Jinping has indicated to the nation’s financial overseers that unconventional methods of adding liquidity to the economy should be part of the monetary policy tools.

Yuan Gains as China Sees Fastest Factory Growth