The Chinese yuan dives this Monday after the People’s Bank of China (PBOC) decides to skip its repo rate cut earlier. Aside from that, the significant rebound in the country’s manufacturing activity wasn’t enough to bolster the currency in sessions.
The PBOC said that there is still enough liquidity in the country’s banking system, so they opted to skip their reverse repos today. In an official statement, the bank reported a reasonable level of liquidity at the moment.
The remains committed to its prudent monetary policy this 2019, not too tight nor not too loose strategy. It also meticulously maintains market liquidity at a reasonable level this year.
The CNY CNH exchange rate flatlined in local trading sessions.
Meanwhile, the USD CNY trading pair hiked as the greenback’s strength overpowers the Chinese yuan. The pair went up by 0.17% or 0.0120 points this Monday. It is currently trading for ¥7.0428 in sessions.
The US dollar is looking to continue its positive momentum against the yuan and reclaim its rough losses from October.
Factory Recovery
China’s manufacturing industry showed promising figures in its recent release. Although the upbeat figures weren’t enough to give the Chinese yuan a lift this Monday.
The CNY AUD exchange rate contracted by 0.47% or 0.0010 points today. The pair currently exchange for AU$0.2093 and has even dipped as low as AU$0.2092 today.
Meanwhile, the kiwi took it a step further and dragged the Chinese yuan even lower in sessions. The CNY NZD trading pair depreciated by 0.74$ or 0.0016 points, trading for NZ$0.2197 in sessions.
The November Caixin China Manufacturing PMI went up from 51.7% to 51.8%, topping expectations of contraction to 51.4%.
The Chinese Logistics Information Center also released its report last November 30, showing contraction for the first time in seven months. The factory PMI climbed 50.2% from 49.3% prior.
Data released over the weekend reflects the improvement of the manufacturing industry last month.
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