China’s yuan falls past key 7 per US dollar mark after ‘disappointing’ economic data

The offshore yuan weakened to 7.0160 per US dollar on Wednesday after China’s April industrial output and retail sales growth undershot forecasts

The onshore yuan followed suit and also weakened past 7 per US dollar for the first time since early December

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Adding to the mixed post-coronavirus economic recovery, China’s retail sales and industrial production also fell short of expectations last month. Photo: Reuters

Published: 1:04pm, 17 May 2023Updated: 4:47pm, 17 May 2023

Both the onshore and offshore yuan weakened past 7 per US dollar on Wednesday for the first time in five months amid geopolitical tensions and more signs of China’s post-Covid economic recovery losing steam.

China’s April industrial output and retail sales growth undershot forecasts, official data showed on Tuesday, suggesting the economy lost further momentum at the start of the second quarter and adding to the raft of recent data highlighting a wobbly post-Covid recovery.

The offshore yuan hit 7.0160, while its onshore counterpart also weakened past 7 per US dollar for the first time since early December. The onshore yuan finished the domestic session at 6.9985 per US dollar, its weakest close since December 6.

“[The yuan] sentiment deteriorated quickly following the disappointing China hard data for April,” wrote Ken Cheung, foreign exchange strategist at Mizuho Bank.

In addition, “the risk of US restrictions on Chinese investment during the G7 meeting this weekend was discouraging to foreign capital inflow,” Cheung added.

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