USD/CNH keeps bid above 7.00 after China trade data
- USD/CNH continues to gain altitude despite upbeat China data.
- China's exports rose for the third straight month in June.
- Imports witnessed a strong rebound, a sign of recovery in the domestic demand.
The China data released soon before press time showed exports rose for the third consecutive month in June, a sign of recovery in the global economy. Even so, the offshore yuan remains under pressure, keeping USD/CNH better bid above 7.000.
Exports rose 4.3% year-on-year in June, beating the expected rise of 3.5% following May’s 1.4% increase. Meanwhile, imports, a sign of domestic demand, rose 6.2% year-on-year, topping the forecast of -4.7% contraction by a big margin and up significantly from the preceding month's print of -12.7%. The strong bounce in imports is an encouraging sign for the global economy.
As such, the global equity markets may pick up a bid, in which case the safe-haven US dollar would drop, pushing USD/CNH back below 7.00. At press time, the futures tied to the S&P 500 are reporting a 0.20% gain.
Risk sentiment on Wall Street soured on Monday as the rising number of new coronavirus cases threatened to derail the reopening of economies in major US states. In addition, the US-China tensions over China’s claim on the South China sea added to bearish pressures around the stocks.
Technical levels