Yuan hits 16-month high amid recovery

Business | Agencies and Kevin Xu 16 Sep 2020

The onshore and offshore yuan jumped to their highest levels in 16 months versus the US dollar yesterday after data pointed to an economic recovery in China following several coronavirus-linked shutdowns.

Meanwhile, the US dollar fell amid an improvement in risk appetite while Nomura estimated that the yuan would rise above the 6.65-per-dollar level if Democrat contender Joe Biden won the US presidential elections in November.

The offshore yuan hit a 16-month high of 6.7725 to the US dollar before easing slightly while the onshore yuan rose 460 basis points to 6.7775 per US dollar.

China's economic recovery from Covid-19 accelerated, spurred by a rebound in consumption as virus restrictions eased and by larger-than-expected gains in industrial output.

Retail sales rose for the first time this year in August and up 0.5 percent from a year earlier, while industrial production grew 5.6 percent against a forecast of 5.1 percent, the National Bureau of Statistics said.

In the first eight months, retail sales fell 8.6 percent, industrial production rose 0.4 percent, and fixed-asset investment was 0.3 percent lower than the same period in 2019.

Fu Linghui, at the National Bureau of Statistics, said China's foreign trade and investment performance had been better than expected.

Meanwhile, the unemployment rate in urban areas stood at 5.6 percent in August, 0.1 percentage points lower than that of July.

On the tourism front, domestic tourism revenue was expected to fall 52 percent to 2.76 trillion yuan (HK$3.15 trillion) in 2020 as the industry continues to reel from the coronavirus, according to the China Tourism Academy.

In other news, real estate investment rose at its fastest pace in 16 months in August, supported by robust sales, as the property market helped underpin the recovery.

 

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