Chinese Yuan Strengthens Against the US Dollar as Chinese Manufacturing Expands
On Monday, the Chinese yuan has strengthened slightly against the US dollar on the release of the Caixin/Markit Manufacturing PMI for August. At the time of writing, USD/CNH is trading at around 7.166.
The Caixin China General Manufacturing PMI rose to 50.4 in August from 49.9 in July, indicating that the sector was in expansion. The growth in the manufacturing sector was attributed to firms registering the fastest increase in production in five months.
Total new orders received by Chinese manufacturers during August remained steady. While export orders declined, domestic demand rose higher, supporting this figure and keeping it steady when compared with July’s figures.
USD/CNH has also turned bearish following the latest round of tariffs implemented by the US on Chinese imports, while China has imposed a 5% levy on WTI. This latest development in the trade war has caused the US dollar to weaken, driving this forex pair lower.
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