USDCNH Analysis – 1-July-2024

USD/CNH—The offshore yuan fell beyond 7.29 per dollar, staying near its lowest point in over seven months. Investors reacted to the mixed Chinese PMI data. A private survey showed strong growth in manufacturing for June, hitting a three-year high and beating expectations. This indicated positive momentum in the industrial sector.

USDCNH Analysis – 1-July-2024

China’s Manufacturing Slump Continues

However, official data released over the weekend painted a different picture. It showed that manufacturing continued to contract for the second month in a row, suggesting more stimulus measures are needed as China aims for economic stability.

The yuan has been under pressure since early 2023 due to a long-lasting property crisis, weak consumer spending, and declining yields, which have caused capital to flow out of China.