The offshore yuan climbed to a six-month high after a report showed China’s trade surplus rose to a record and its export growth beat estimates.
The currency added 0.11 percent to 6.1344 per US dollar as of 4:26pm yesterday in Hong Kong, data compiled by Bloomberg show. It earlier advanced to 6.1338, the strongest level since March 14. Twelve-month nondeliverable forwards gained 0.08 percent to 6.2215. China’s onshore financial markets were closed for a holiday yesterday.
The trade excess rose to US$49.84 billion last month from July’s US$47.30 billion, official data showed yesterday. Exports expanded 9.4 percent, beating the 9 percent median forecast in a Bloomberg survey, while imports unexpectedly shrank. The Bloomberg Dollar Spot Index fell 0.1 percent on Friday after data showed that US employers added the fewest jobs last month since December last year, fueling speculation that the weaker growth would prevent the US Federal Reserve from raising interest rates.
“First, it’s the trade numbers that showed a much bigger trade surplus than the market expected,” said Irene Cheung (張雅怡), a Singapore-based strategist at Australia and New Zealand Banking Group Ltd. “The other thing is the weaker-than-expected nonfarm payrolls data on Friday, which means that there’s no reason to expect the Fed to change its mind about the job market.”
China’s strong trade data, along with a weaker US dollar, might prompt China’s central bank to raise the yuan’s fixing tomorrow, Cheung added.
In the US, the 142,000 advance in payrolls was the smallest this year and followed a revised 212,000 gain in July. The reading was lower than the most pessimistic estimate in a Bloomberg survey of economists.
One-month implied volatility in the offshore yuan, a measure of expected swings in the exchange rate used to price options, fell two basis points, or 0.02 percentage point, to 2.10 percent.
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