Even as the trade war with the US rages on, Chinese trade balance for July has posted an unexpected increase to $45.06 billion, beating the forecast of $42.65 billion. Chinese exports have also risen 3.3% higher in July, coming in higher than June when exports had declined by 1.4%, even while expectations were for a 1% decline for this month.

Imports in China came down by 5.6%, however, analysts were expecting a drop by 9% in imports YoY for the month of July. While external demand continues to remain soft, possible stimulus efforts such as tax cuts have helped support the Chinese economy which has been reeling under the effects of the trade war with the US.

This news should offer some support to the Chinese yuan which has weakened below 7 against the US dollar after Trump announced more tariffs on Chinese goods. At the time of writing, USD/CNH is trading at around 7.07.