Gross domestic product increased 7.5 percent in the second quarter from a year earlier, data showed yesterday, more than the 7.4 percent predicted in a Bloomberg survey. GDP rose 7.4 percent in the previous three months. The onshore yuan traded in Shanghai is Asia’s worst-performing currency this year.
“As China’s economic growth accelerates, the yuan will be able to recover most of its losses this year as confidence is rising,” said Banny Lam, Hong Kong-based co-head of research at Agricultural Bank of China International Securities Ltd.
The offshore yuan rose 0.1 percent to 6.2032 per dollar as of 5:03 p.m. in Hong Kong, the biggest advance since July 4, according to data compiled by Bloomberg. In onshore trading in Shanghai, it was little changed at 6.2045 at the close, China Foreign Exchange Trade System prices show. The currency has dropped 2.4 percent this year.
Citigroup Inc. raised its full-year growth forecast for Asia’s biggest economy to 7.5 percent today from 7.3 percent, a day after JPMorgan Chase & Co. revised its estimate to 7.3 percent from 7.2 percent.
The People’s Bank of China cut its daily reference rate for a fifth day, setting it 0.05 percent weaker at 6.1564 per dollar. The currency in Shanghai traded at a 0.8 percent discount to the fixing, within the 2 percent allowed limit.
Twelve-month non-deliverable forwards were steady at 6.2595, a 0.9 percent discount to the onshore spot rate. One-month implied volatility in the yuan, a gauge of expected moves in the exchange rate used to price options, dropped three basis points, or 0.03 percentage point, to 1.62 percent.
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