China’s Yuan retreats as PBOC sets lower daily guidance
China’s Yuan retreated for a third straight session against the U.S. dollar after the central bank of China set the daily guidance lower, where a report China’s trade surplus widened in May failed to help the yuan.
The People’s Bank of China set the midpoint at 6.1205 per dollar, which is 0.04 percent lower than the prior guidance of 6.1181.
As of 10:53 GMT, the USDCNY traded higher at 6.2048 after opening at 6.2019.
While China’s trade surplus leaped to $59.5bn in May from $34.1bn in April, the data was interpreted negatively as the surplus was buoyed by a fall in both exports and imports.
Imports dropped 17.6 percent, reflecting the weakness in domestic consumption, while exports plunged 2.5 percent.
Still, the world’s second-biggest economy is reeling from a slowdown in growth, after posting its lowest growth pace in six years in the first quarter.
The Chinese economy eased expansion to 7.0 percent in the three months through March 31 from 7.3 percent the previous quarter.
China’s PBOC slashed its interest rates for a third time in six months to bolster the economy.
Despite the methods of monetary easing used by the PBOC this year, markets still predict more stimulus in the coming months.
Following the recent rise in the yuan against the U.S. dollar, the pair did an upside correction to hover above 23.6 Fibo level.
Yet it faced some resistance to remain moving range bounded between the support and resistance depicted on the daily chart.