The Chinese yuan advanced today as the government report showed that manufacturing continued to expand last month and Chinese officials tried to soothe worries about the recent liquidity crunch.
According to the official data, the China Manufacturing Purchasing Managers’ Index fell from 50.8 in May to 50.1 in June, but remained in the expansionary territory (staying above the 50.0 level of neutrality). At the same time, the HSBC China Manufacturing PMI fell from 49.2 to 48.2 last month, indicating a contraction of the sector. Shang Fulin, chairman of the China Banking Regulatory Commission, said that banks’ cash reserves are much bigger than banks need for their usual activities.
USD/CNY declined from 6.1422 to 6.1297 as of 12:01 GMT today.
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