Chinese yuan drops as zero-Covid policy continues to dent data
China trade data shows that exports and imports have both fallen for the first time since May 2020. China’s zero-Covid policy is widely expected to be behind the numbers which have seen the Chinese yuan drop.
(Video Transcript)
Imports and exports fall
For the first time since May 2020, China's exports and imports simultaneously fell as the country's zero-Covid policy continues to bite.
Exports unexpectedly declined by a margin of 0.3% from this time last year, after a 5.7% gain in September. That was well below analyst expectations for a 4.3% increase. It was the first annual decline since May 2020.
Also, imports declined 0.7%, from a 0.3% gain in September on a 0.1% increase forecast.
Now, the overall trade figures resulted in a trade surplus of $85.15 billion, missing forecasts of $95.95 billion.
USD/CNH
I want to show you what's happening with the Chinese yuan. This is the dollar against the yuan. So this rising market that we've got here, these are 30-minute candles, is the US dollar winning out against that Chinese yuan.
I think much of what's been happening with the Chinese economy and also the Chinese yuan has been all about the zero-Covid policy which has brought about these numbers today.
You can see in the session this has been this big gap up. This was the Friday close down here on the 4th of November. Then you have this big gap up for the US dollar. And when we saw the release of these figures, we saw a further rise in the US dollar against the Chinese yuan.
This is the offshore Chinese yuan and is tradable on the IG platform. I want to show you the daily candle, just to show you what happened. This drop on Friday for the US dollar, it was all about the dollar and trade around non-farm payrolls. It hit this line of support at 71 654. Today we've seen that rise in the dollar as a result of this economic data in the Chinese economy.
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