USD/CNY: Chinese exports surge, US sanctions to limit yuan appreciation – TDS
07.12.2020, 08:45

USD/CNY: Chinese exports surge, US sanctions to limit yuan appreciation – TDS

FXStreet reports that Mitul Kotecha, Senior Emerging Markets Strategist at TD Securities said that Chinese November exports surged at their fastest pace since February 2018. The data is positive for CNY/CNH but sanctions cap gains.

“The data revealed a very strong 21.1% YoY increase in exports and a smaller than consensus 4.5% YoY increase in imports. Exports grew for a sixth straight month, recording the fastest pace of increase since Feb 2018 while imports rose for a third straight month.”

“The data bodes well for Chinese and Asian markets, though this will be mitigated somewhat, by new US sanctions on Chinese officials, and news that FTSE Russell is dropping 8 Chinese companies from its indices, something that could be followed by other equity index providers. In the remaining weeks of President Trump's tenure, further measures are likely.”

“We expect further CNY appreciation in the months ahead. In the near-term, a break below 6.50 USD/CNY looms, though its worth highlighting that the CNY CFETS trade-weighted index is at its lowest levels in around a month, implying relatively less strength compared to its peers recently.” 

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