Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ The Chinese currency reached a 16-month high with rising retail spending

The Chinese currency reached a 16-month high with rising retail spending

The Chinese currency reached its highest level in more than a year, as retail sales increased for the first time in 2020, highlighting the country’s economic recovery from the pandemic.

The renminbit rose 0.4% to 6.7857 Rmb per dollar in mainland China on Tuesday, the highest level since May 2019. This coincided with official data showing that retail spending had risen. increased by 0.5% in August compared to a year earlier.

The less tightly regulated offshore renminbi, which trades in large hubs outside China, rose 0.3% to 6.8 Rmb per dollar.

Ken Cheng, a strategist at Mizuho Bank, said the renminbit was also boosted by hopes of improving relations between Beijing and Washington following signs of a deal for the future of the popular Chinese app TikTok.

“As concerns about Sino-US tensions eased briefly, investors turned their attention to China̵

7;s strong fundamentals,” Mr Cheung said of the improvement in retail sales. He said the renminbi drought could rise as high as Rmb6.75 per dollar.

Meanwhile, China’s central bank “showed several signs of resistance against a stronger yuan, paving the way for a appreciation of the currency,” analysts at JPMorgan wrote in a note. They added that the conditions were “favorable for less formal resistance against the currency force as a whole, especially in the absence of obvious signs of a revaluation of the renminbi”.

Optimized Chinese economic data also increased the country’s reserves. The CSI 300 index of shares registered in Shanghai and Shenzhen rose 0.6%, reversing the initial losses. The Hang Seng index in Hong Kong added 0.5%.

“The tightening of the labor market and the resurgence of consumer confidence suggest that the recovery in services must continue,” said Julian Evans-Pritchard, a senior economist in China at Capital Economics. He added that the Chinese economy is “on track to return to its pre-viral growth before the end of the year.”

Elsewhere in the Asia-Pacific region, Japan’s Topix index fell 0.6 percent and Australia’s S & P / ASX 200 fell 0.1 percent.

Markets in Europe were depressed on Tuesday morning, although data show that the British labor market has driven almost 700,000 jobs since the beginning of the coronavirus blockade and growing infections in the region.

Sterling rose 0.1% to $ 1.2585, while Britain’s FTSE 100, Germany’s Dax and Europe’s Stoxx 600 were generally equal.

Although the UK’s unemployment rate rose to 4.1% in the three months to July, Samuel Thombs, Britain’s chief economist at Pantheon Macroeconomics, said he expected wages to “fall much more in September” as the government’s support scheme ends, and unemployment reaches a peak of 8% in the winter.

Futures markets showed a slight rise in US stocks when Wall Street opened later in the day, with the S&P 500 up 0.3%. On Monday, the Wall Street benchmark rose 1.3%, while the tech Nasdaq added 2%.

The dollar, measured against a basket of his colleagues, fell 0.1% on Tuesday.

Investors expect important decisions this week from central banks, including the US Federal Reserve, the Bank of Japan and the Bank of England.

Source link