The Purchasing Managers’ Index was at 52 in May, the lowest in nine months, the China Federation of Logistics and Purchasing said in an e-mailed statement today. The number was higher than the median forecast of 51.6 in a Bloomberg News survey. Nomura Holdings Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. cut economic growth forecasts for China last month, reflecting the impact of four interest-rate rises and eight increases in lenders’ reserve-requirement ratios since September.
“The pace of renminbi rises may slow as the economy cools and inflation comes off the boil, but I think there will be that pressure there to appreciate through the rest of this year,” said Jonathan Cavenagh, a foreign-exchange strategist in Singapore at Westpac Banking Corp. “Today’s Chinese PMI data came a bit stronger than expected but still quite soft,”
The yuan increased 0.02 percent to 6.4780 per dollar as of 6:16 p.m. in Shanghai, according to the China Foreign Exchange Trade System. The currency reached 6.4777 earlier, the strongest level since the country unified official and market exchange rates at the end of 1993. The yuan has advanced 1.7 percent this year.
Twelve-month non-deliverable forwards gained 0.02 percent to 6.3590 per dollar, a 1.9 percent premium to the onshore spot rate, according to data compiled by Bloomberg. In Hong Kong’s offshore market, the currency strengthened 0.06 percent to 6.4765.
The People’s Bank of China raised the currency’s reference rate 0.01 percent to 6.4837 per dollar today, the strongest level since July 2005. The yuan isn’t allowed to move more than 0.5 percent on either side of the central bank’s daily fixing.
Consumer prices rose 5.3 percent in April from a year earlier, slightly below the 5.4 percent increase in March that was the biggest since July 2008.
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