Yuan higher as GDP data shows growth uptick

The onshore yuan rose for a sixth day on Monday after China’s central bank raised the currency’s daily reference rate amid a declining US dollar and after the release of China’s GDP data.

Jimmy Zhu, chief strategist at Fullerton Markets said the yuan had been benefitting from the dollar’s underperformance after Federal Reserve Chairwoman Janet Yellen’s dovish comments last week that showed the Fed’s concern on the recent soft inflation.

China’s official data showed on Monday that the economy expanded 6.9 per cent in the second quarter, beating an estimated 6.8 per cent growth from a poll of analysts by Reuters.

AXA Investment Managers raises its growth forecast to 6.7 per cent in 2017 after China’s second quarter data showed resilience in domestic demand. Tightening of housing market policies and monetary conditions failed to dampen investment growth, while consumer spending was buoyed by strong income growth, AXA analysts said.

Meanwhile President Xi Jinping said at the National Financial Work Conference, held on July 14-15, that China should steadily promote the yuan’s internationalisation, deepen reforms in the yuan exchange rate mechanism, and achieve yuan convertibility.

The Financial Work meeting also unveiled that a super regulator will be established under the State Council to coordinate between the regulators of banking, securities and insurance.