CURRENCIES: China's Yuan Nears 2019 Low After Weaker-than-expected Economic Data
May 15 2019 - 2:13PM
Dow Jones News
By Aaron Hankin
The Chinese yuan traded lower on Wednesday after a round of
weaker-than-expected economic data
(https://www.wsj.com/articles/chinas-economy-was-losing-steam-even-before-trumps-new-tariffs-11557899055)
out the world's second-largest economy.
The offshore yuan hit an intraday low at 6.9177, just shy of its
2019 low at 6.9194 versus the dollar.
In early afternoon action, one dollar was buying 6.9087
yuan.
Read:Opinion: Here's the new China math for U.S. stock market
investors
(http://www.marketwatch.com/story/heres-the-new-china-calculation-for-us-stock-market-investors-2019-05-13)
What are analysts saying?
"Economic indicators out of China today fell short of
expectations, raising fresh doubts about the growth outlook.
Industrial output slowed sharply from 8.5% to 5.4% year-over-year
in April, while retail sales grew at the weakest rate in 16 years,"
wrote Raffi Boyadjian, investment research analyst at XM.
Read:Lloyd Blankfein: Tariffs may be 'an effective negotiating
tool'
(http://www.marketwatch.com/story/lloyd-blankfein-tariffs-may-be-an-effective-negotiating-tool-2019-05-14)
China data weighs on the Aussie
The Australian dollar, a bellwether for the Chinese economy, was
the worst-performing major currency on Wednesday, hitting a fresh
four-month low versus the buck.
"The downbeat [China economic] numbers weighed on the Australian
dollar, which is often viewed as a proxy for China-related
developments. Further weighing on the Aussie were unimpressive wage
growth figures out of Australia, pushing the currency to a fresh
4-month low of 0.6917 versus the U.S. dollar today," Boyadjian
added.
In most recent trade the Aussie was at $0.6922 compared with
$0.6944.
The neighboring New Zealand dollar fell to $0.6562 compared with
$0.6576 late Tuesday.
Read:Opinion: Washington and Wall Street wake up to the reality
that Beijing is happy to walk away
(http://www.marketwatch.com/story/washington-and-wall-street-wake-up-to-the-reality-that-beijing-is-happy-to-walk-away-2019-05-13)
The greenback
The ICE U.S. Dollar Index, a measure of the greenback's strength
versus six trading rivals, was higher at 97.689.
The majority of the gains for the greenback came against the
British pound, which fell to $1.2842, down 0.5%.
"GBP/USD remains in a downward spiral as talks on Brexit
continue at a slow pace. Parliament has set the date to vote on the
Brexit bill during the first week of June," wrote Dean Popplewell,
vice president of market analysis, at Oanda.
Meanwhile, the euro was little changed at $1.1206 and the Swiss
franc was unchanged, with a single dollar fetching 1.0093
francs.
Elsewhere, the Japanese yen was a little higher at
Yen109.47.
Read:Trump's trade war with China will hit TVs, dishwashers,
toys, lithium batteries, iPhones -- even Silly Putty
(http://www.marketwatch.com/story/trumps-latest-tariff-hike-on-chinese-goods-will-hit-the-toy-industry-and-electronics-2019-05-10)
Economic data
Retail sales for the month of April fell 0.2%, the government
said on Wednesday. Economists polled by MarketWatch had expected
sales to rise 0.1%.
Read: Retail sales fall in April and show broad weakness in key
part of the U.S. economy
(http://www.marketwatch.com/story/retail-sales-fall-02-in-april-2019-05-15)
U.S. stocks started trade under pressure in the wake of the
weaker-than-expected data before turning mostly higher.
Read:Stock market turns up after upbeat reports on international
trade relations
(http://www.marketwatch.com/story/stock-futures-edge-lower-ahead-of-retail-sales-data-trade-worries-linger-2019-05-15)
(END) Dow Jones Newswires
May 15, 2019 13:58 ET (17:58 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.