USD/CNY rate spikes ahead of crucial China economic data dump

August 13, 2023 09:30 PM PDT | By Invezz

USD/CNY rate spikes ahead of crucial China economic data dump — Image source: Invezz

China’s economic data ahead

The USD/CNY and the USD/CNH pairs have been in a bullish trend in the past few months as concerns about China’s economy continued. Last week, we wrote that China’s exports and imports plunged in July, pushing the trade surplus up to over $80 billion. This is important since China is primarily an export-driven economy.

The next CNY news will come out on Tuesday when the government will publish the next economic numbers. Economists expect the data to show that China’s retail sales rose from 3.1% in June to 4.8% in July. Retail spending has held quite well during the ongoing reopening.

Economists also expect that industrial production and fixed asset investments rose at a slower pace in July. These numbers have been disappointing in the past few months as the economic recovery faces headwinds.

China’s economy has struggled in the past few months, pushing Beijing to implement a series of stimulus measures. These measures are mostly aimed at boosting domestic consumption.

Still, new challenges are emerging. The real estate sector is on edge, as I wrote about the challenges of Country Garden, the struggling real estate empire. It is the latest company in the industry to come on the verge of collapsing.

Watch here: https://www.youtube.com/embed/2I3TWNMZkUM?feature=oembed

At the same time, the cold war with Washington has continued. Last week, the Biden administration announced another series of sanctions on China’s tech sector. As a result, foreign direct investments are expected to continue falling.

USD/CNY technical analysis

USDCNY chart by TradingView

The USD to CNY exchange rate continued rising on Monday amid rising concerns about the Chinese economy. It is now sitting at the important resistance level of 7.2670, the highest level on June 30th. The pair’s upward move is being supported by the 25-day and 50-day moving averages.

Therefore, the outlook for the USD to yuan pair is bullish, with the next level to watch being at 7.3265. A move below the support at 7.2258 will invalidate the bullish view.

The post USD/CNY rate spikes ahead of crucial China economic data dump appeared first on Invezz.

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