Yuan eases as investment banks cut China's growth outlook



SHANGHAI, May 19 (Reuters) - The yuan eased against the dollar on Thursday as market sentiment soured after some major global investment banks cut their expectations for China's economic growth.

Concerns of a potential repeat of Shanghai-like lockdowns in other major Chinese cities also pressured the currency, as the central government appears to be in no mood to ease its tough zero-COVID policy.

Standard Chartered became the latest financial institution to cut its 2022 growth forecast for China, lowering it to 4.1% from 5% to reflect an economic contraction in April due to COVID-19 disruptions.

"Quality of growth in the near term will be affected negatively, in our view," the bank said in a note.

"On the one hand, China may have to rely on infrastructure investment, which tends to be credit intensive and have a heavy carbon footprint, to jumpstart the economy."

Analysts at Goldman Sachs lowered their China 2022 growth forecast to 4% from 4.5% a day earlier, also citing COVID-related damage to the economy in the second quarter.

Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.7524 per dollar, weaker than the previous fix of 6.7421.

In the spot market, the onshore yuan CNY=CFXS opened at 6.7648 per dollar and was changing hands at 6.7597 at midday, 67 pips or 0.1% weaker than the previous late session close.

Some currency traders said the yuan was likely to consolidate on the firmer side of the closely watched 6.8 per dollar level as markets wait for a clearer picture of business resumptions in Shanghai following a weeks-long lockdown.

"Easing of Shanghai's restrictions have been underwhelming with a large majority of shops still shut and stringent restrictions hampering operations," analysts at Maybank said in a note.

"Fears that another major city will be put under a Shanghai-like lockdown continue to undermine sentiment."

On Thursday, deputy mayor Zhang Wei told a news conference that Shanghai will start to allow more businesses in zero-COVID areas to resume normal operations from the start of June, as the city prepares for the end of lockdown.

But analysts say it could take weeks for business conditions to normalize, and consumption may remain weak even after industrial output bottoms out.

Separately, Premier Li Keqiang was quoted by state media that China has policy room to cope with challenges, as the downward pressure on the economy increases.

By midday, the global dollar index .DXY fell to 103.627 from the previous close of 103.81, while the offshore yuan CNH=D3 was trading at 6.7729 per dollar.

The yuan market at 0343 GMT:

ONSHORE SPOT: Item

Current Previous Change PBOC midpoint

6.7524 6.7421

-0.15% CNY=SAEC

Spot yuan

6.7597 6.753

-0.10% CNY=CFXS

Divergence from

0.11%

midpoint*

Spot change YTD

-5.99% Spot change since 2005

22.44% revaluation

Key indexes:

Item

Current

Previous Change

Thomson

100.43

100.57

-0.1 Reuters/HKEX

CNH index

Dollar index

103.627

103.81

-0.2

*Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2 percent from official midpoint rate it sets each morning.

OFFSHORE CNH MARKET Instrument

Current Difference

from onshore Offshore spot yuan

6.7729

-0.19% CNH= *

Offshore

6.802

-0.73% non-deliverable

forwards

CNY1YNDFOR= **

*Premium for offshore spot over onshore CNY=CFXS **Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. CNY=SAEC .
Reporting by Winni Zhou and Andrew Galbraith; Editing by Kim Coghill

Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.

Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.

Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.

Nous utilisons des cookies pour vous donner la meilleure expérience possible de notre site internet. En savoir plus ou modifier vos paramètres de cookies.

Avertissement sur les risques : votre capital est à risque. Les produits à effet de levier ne sont pas recommandés pour tous. Veuillez consulter notre Divulgation des risques