The USD/CNY pair was at a standstill after the release of better-than-expected Chinese exports and imports data. The pair was trading at 6.4651 on Tuesday.
Chinese Economic Outlook
China’s exports spiked in June at a faster than expected pace. This was boosted by solid global demand for Chinese goods. China’s imports also grew and surpassed the estimated forecast. However, the pace eased from May. Imports were boosted by high raw material costs.
Exports climbed 32.2% in dollar terms from a year earlier. It surpassed the previous month’s 27.9% and the estimated forecast for a 23.1% increase. The easing of global lockdown restriction, as well as successful vaccination rollout, drove an uptick in global demand for Chinese goods.
Imports rose 36.7% on a year-on-year basis in June. Despite surpassing the 30.0% estimate forecast, it eased from the 51.1% advance in May which was the highest in a decade.
Despite the growth in exports and imports, some signs indicate a slowdown in momentum in the second half of this year. Supply shortages, as well as high shipping costs, could cause hiccups in the economic growth of the country.
China recorded a trade surplus of $51.53 billion in June 2021. This was higher than the poll’s forecast of $44.20 billion as well as the previous $45.54 billion.
US Inflation Concerns
The USD/CNY pair will react to the key US inflation data later in the day. The US Consumer Price Index (CPI) data for June is expected to come in lower at 0.5% from the previous 0.6% in May.
In the last months to May 2021, all items index increased 5.0% before seasonal adjustment. This was the highest 12-months increase since August 2008. June’s core CPI, less food and energy, is expected to slump to 0.4% from the previous 0.7%.
The USD/CNY pair will also react to the weekly initial jobless claims data later in the week. The initial jobless claims for the week ending July 3 came in higher at 373,000. The initial jobless claims are expected to decline to 360,000.