Chinese Yuan Weakens As Growth Slows to 28-Year Low

The  Chinese yuan weakened against its major currency rivals to  kick off the  trading week as  the  latest gross domestic product (GDP) figures were released. And  it was not pretty for  the  world’s second-largest economy, though some traders are finding needles in  a  haystack with government data.

On  Monday, China announced that its official economic growth totaled 6.6% in  2018, which represents the  slowest pace since 1990. This is in  line with what the  market had anticipated, and  it is down from a  revised 6.8% in  2017.
In  the  fourth quarter, gross domestic product (GDP) growth came in  at  6.4%, down from 6.5% year-over-year growth in  the  third quarter. This does match median estimates.
On  the  data front, industrial output advanced 5.7% last month, beating expectations of  5.3% and  November’s 5.4%. Retail sales surged 8.2% last month, up from November’s 8.1%, and  is in  line with forecasts. Real estate investment rose 8.2%, down from 9.3% in  November. For  2018, property sales by  area climbed 1.3% compared to  the  same time from the  previous year.
The  announcement comes as  the  People’s Bank of  China (PBOC) pumped $83 billion into its banking system, a  record amount of  cash injection in  a  single day. Experts warn that this could be a  sign the  national economy could be under tremendous pressure and  conditions are worse than what is being reported.
Earlier this month, the  government reaffirmed its decision to  cut its reserve requirement ratio next week. This is the  amount of  money that financial institutions are mandated to  have  â€” there were four of  these cuts in  2018.
The  federal government has complemented this move with tax cuts and  state stimulus. Beijing has also reportedly proposed to  increase its imports of  US goods to  $1 trillion a  year by  2024, a  move that would eliminate its surplus with the  world’s largest economy.
The  USD/CNY currency pair jumped 0.29% to  6.7983, from an  opening of  6.7788, at  17:37 GMT on  Monday. The  EUR/CNY edged up 0.31% to  7.7280, from an  opening of  7.7038.

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