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PBOC stance and China data to steer yuan and regional FX
MUFG says July activity indicators will be key after weak Q2 GDP, while PBOC continues guiding USD/CNY lower via daily fixing.
MUFG’s Asia FX Weekly, covered by FXStreet, flags China’s July activity data as a key driver for the Chinese yuan and regional currencies after weak Q2 GDP.
The notes point to ongoing pressure from fixed asset investment weakness and property-sector challenges, and they also weigh whether domestic demand is stabilizing enough and whether the PBOC will tolerate continued yuan strength.
MUFG also highlights that the PBOC has been guiding USD/CNY lower through its daily fixing, suggesting authorities remain focused on the pace of yuan moves.
The broader FX tape mentioned alongside the China outlook includes firmer EUR/USD and GBP/USD, plus a rebound in gold, as the US dollar weakens on shifting rate expectations and ongoing Middle East concerns.
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