Yuan forwards weakened, extending last week’s decline, as signs global economic growth is losing momentum damped China’s inflation outlook, easing appreciation pressure on the currency.
Premier Wen Jiabao said he’s confident China will keep inflation at or below 5 percent this year, although it will be difficult to meet the official target of 4 percent, according to a Radio Television Hong Kong report today. Wen also said economic growth may exceed 8 percent this year, compared with 10.3 percent in 2010, according to the report. Global commodity prices have fallen more than 8 percent in the past two weeks.
“The government wants to see a soft landing in the economy,” said Carlos Cheung, a Hong Kong-based foreign- exchange dealer at Bank of Communications Ltd. “The pace of appreciation will slow” in the second half.
Twelve-month non-deliverable forwards declined 0.15 percent to 6.4015 per dollar as of 4:30 p.m. in Hong Kong, following a 0.2 percent decline last week, according to data compiled by Bloomberg. The contracts were at a 1.2 percent premium to the spot rate in Shanghai.
The Standard & Poor’s GSCI index of commodities dropped 3.6 percent last week and is heading for a second monthly decline, led by silver, coffee and nickel. Federal Reserve policy makers last week cut their forecasts for 2011 U.S. growth to a range of 2.7 percent to 2.9 percent, down from an April forecast of 3.1 percent to 3.3 percent.
Inflation to Slow
Consumer prices in China rose 5.5 percent in May from a year earlier, the most in 34 months, according to official data. Inflation won’t exceed 6 percent in any single month as the pace of price increases stabilizes and slows in the second half, Fan Gang, a former academic adviser to the People’s Bank of China, said yesterday.
The People’s Bank of China set the yuan’s reference rate weaker for a third day, fixing it at 6.4750 per dollar. The yuan isn’t allowed to move more than 0.5 percent on either side of the daily fixing.
The yuan fell 0.06 percent to 6.4772 per dollar in Shanghai, according to the China Foreign Exchange Trade System. In Hong Kong’s offshore market, the yuan retreated 0.15 percent to 6.4805 per dollar.
Source: www.bloomberg.com
Premier Wen Jiabao said he’s confident China will keep inflation at or below 5 percent this year, although it will be difficult to meet the official target of 4 percent, according to a Radio Television Hong Kong report today. Wen also said economic growth may exceed 8 percent this year, compared with 10.3 percent in 2010, according to the report. Global commodity prices have fallen more than 8 percent in the past two weeks.
“The government wants to see a soft landing in the economy,” said Carlos Cheung, a Hong Kong-based foreign- exchange dealer at Bank of Communications Ltd. “The pace of appreciation will slow” in the second half.
Twelve-month non-deliverable forwards declined 0.15 percent to 6.4015 per dollar as of 4:30 p.m. in Hong Kong, following a 0.2 percent decline last week, according to data compiled by Bloomberg. The contracts were at a 1.2 percent premium to the spot rate in Shanghai.
The Standard & Poor’s GSCI index of commodities dropped 3.6 percent last week and is heading for a second monthly decline, led by silver, coffee and nickel. Federal Reserve policy makers last week cut their forecasts for 2011 U.S. growth to a range of 2.7 percent to 2.9 percent, down from an April forecast of 3.1 percent to 3.3 percent.
Inflation to Slow
Consumer prices in China rose 5.5 percent in May from a year earlier, the most in 34 months, according to official data. Inflation won’t exceed 6 percent in any single month as the pace of price increases stabilizes and slows in the second half, Fan Gang, a former academic adviser to the People’s Bank of China, said yesterday.
The People’s Bank of China set the yuan’s reference rate weaker for a third day, fixing it at 6.4750 per dollar. The yuan isn’t allowed to move more than 0.5 percent on either side of the daily fixing.
The yuan fell 0.06 percent to 6.4772 per dollar in Shanghai, according to the China Foreign Exchange Trade System. In Hong Kong’s offshore market, the yuan retreated 0.15 percent to 6.4805 per dollar.
Source: www.bloomberg.com
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